Ccnf*  i 

ifC53 


Duke  University  Libraries 

Proceedings  of 
Conf  Pam  #653 


Treasure  f^Mlin 


PROCEEDINGS 


OF  THK 


HELD  IN  MACON,  C4A.,  JUJ.Y  4,  186J, 

1 1  niimriinicatlon  on,  the  proposed  issue  of  Treasury 

yof>'.<i  I)}/  the  'Confederate  Governmeni, 

r.Ybl'FF  GREEN.  ESQ. 


Macon,  July  4th,  1861. 

•»  , 

The  Convention  assembled  at  Concert  Hall  at  11  o'clock, 
•  A.  M.,  and  was  organized|,by  tlie  appointment  of  Col.  James 
M.  Chamber?  of  the  county  of  Muscogee,  as  President,  srtid  Col. 
•  ■"'ilin  J.  Gresbam  of  the  county  of  Bibb,  as  Secretary. 

On  motion  of  Col.  A.  S.  Atkinson  of  Qeorgia,  tho  following 
resolution  was  adopted : 

Pesolved,_That  all  citizens  of  th^iOon federate^ States,  wlio 
feel  an  interest  in  the  object  of  the  Convention,  be  invited  to     j 
participate  in  its  deliberations.  | 

Under  the  above  resolution,  upon  acall  of  the  States,  a  large   \ 
number  of  delegates,  representing  the  States  of  South  Carolina, 
Georgia,  Florida  and  Alabama,  appeared  and  enrolled  their 
names. 

On  motion  of  J.  H.  R.  Wa^hjjigton,  Esq.,  of  Georgia,  a  cora- 
mitte».of  three  was  Appointed  to  wait  on  Ex-Gov.  Morehead  of 
'Kentuek-y,  whowAs  visiting  the  city,  and  invitp  him  to  occupy 
a  seat  on  the  floor  of  the  house,  and  to  participate  in  the  delib- 
erations of  the  Convention.  Committee  appointed  was  J.  H. 
R.  Washington,  Thaddeus  G.  Holt  and  A.  S.  Atkinson. 

A  ccnnmtihication  from  Dr.  J.  Dickson  Smith,  of  Macon, 
Ga.,  w.is  reiJ^jt'eCing  for  gratuitous  'distribution   a  number  of 


2 

copies  of  an  essay  prepared  bj  him  on  the  hygienic  treatment 
of  slaves,  and  the  essays  placed  on  the  clerk's  desk. 

On  motion  of  Gen.  Whitfield  of  Florida,  the  following  reso- 
lution was  adopted : 

Resolved,  That  a  committee  of  two  delegates  from  each 
State  representee^  in  the  Convention,  he  appointed  by  the  chair 
to  nominate  one  Vice  President  for  the  Convention  from  each 
of  these  States,  and  to  report  rules  for  the  government  of  the  de- 
liberations of  this  body. 

I'nder  the  above  resolution,  the  Chairman  appointed  E.  D. 
'  Huguenin,  G.  A.  Chaires,  I.  C.  "West,  R.  J.  Mays. 

The  committee  appointed  to  wait  on  Gov.  Alorehead,  intro- 
duced him  to  the  Convention,  when  he  was  warmly  greeted, 
and  responded  in  a  most  eloquent  and  patriotic  address  in  rela- 
tion to  the  present  condition  and  future  course  of  Kentucky. 

The  following  resolution,  offered  by  Ex-Gov.  J.  E.  Broome 
of  Florida,  was  adopted  as  a  substitute  for  one  offered  by  Mr.  D. 
"W.  Roberts  of  Cobb  countj'^,  Ga. : 

Resolved,  That  a  committee  of  eleven  be  appointed  by  the 
Chair  to  consider  and  present  to  the  Convention,  the  best  means 
of  aiding  financially  the  Confederate  States  Government. 

The  following  was  the  cjvimittce  appointed  under  this  reso- 
lution :  Gov.  James  E.  Broome,  Gen.  Whitfield,  Geo.  K.  Wal- 
ker, W.  Call,  of  Florida;  Howell  Cobb^  A.  S.  Atkinson,  T.  II. 
R.  Washington,  C.  G.>  Baylor,  Thomas  M.  Foreman,  of  Georgia, 
and  James  W.  Castens  of  Alabama. 

Subsequently,  Gen.  Duff  Green  was  added  to  the  commit- 
tee by  resolution. 

The  following  resolution,  offered  by  Mr.  C.  G.  Baylor,  was 
adopted : 

Resolved,  That  the  Governor  of  this  State  be  requested  to 
take  such  steps  as  may  be  necessary,  to  enable  him  to  place  be- 
fore the  people,  or  their  representatives  in  the  Legislature,  such 
information  as  may  serve  to  promote  the  'development  of  the 
cotton  yarn  interest  of  the  South,  with  a  view  to  opening  a  for- 
eign demand  for  Sonthern  spun  cotton  yarns._ 

Mr.'W*  Call,  of  Florida,  presented  a  series  of  resolutions, 

t.  w^hich  were  read,  and,  on  his  motion,  referred  to  the  committee 

\d' eleven. 

^  Gen.  Duff  Green  presented  an  essay  prepared  by  him  on  the 

Bub|ect  of  the  finances  of  the  Confederate  Government,  which, 


3 

without  being  read,  was,  on  l)is  motion,  referred  to  thecommit- 
tee  of  eleven. 

C.  G.  Baylor  baving  declined  to  serve  on  the  committee  of 
eleven,  Thomas  E.  McKeill,  of  South  Carolina,  was  appointed 
in  his  place. 

On  motion,  two  additional  secretaries  were^ appointed — T. 
R.  Bloom  and  James  T.  Nisbet,  of  Macon. 

Convention  adjourned  until  tomorrow  morning  at  M  o'clock. 


Macon,  July  5t.h.  1801. 

The  Convention  met  pursuant  to  adjournment. 

The  following  resolutions  were  presented  by  Hon.  A.  E. 
Cochran  of  Georgia,  and,  at  his  suggestion,  laid  upon  the  table 
until  the  report  of  the  committee  of  eleven  should  be  disposed  of: 

1.  Resolved,  That  this  Convention,  having  in  view  the  ap- 
preciation of  the  bonds  of  the  Confederate  States  in  the  hands  of 
the  planters,  who  shall  furnish  the  Government  in  its  emergen- 
cy, with  the  products  of  their  labor  in  exchange  for  such  bonds, 
and  with  the  further  view  of  securing  their  general  circulation 
in  payment  of  debts,  at  least  at  par  value,  respectfully  recom- 
mend to  the  Legislatures  of  the  several  States  of  the  Confedera- 
cy, to  authorize  "by  enactment,  the  several  banks  therein  to  is- 
sue bills— say  to  the  amountof  one-third  of  their  capital  stock — 
based  upon  such  Confederate  State  bonds,  dollar  for  dollar,  un- 
der such  regulations  as  each  Legislature  may  deem  wise  and 
proper. 

2.  Resolved,  That  the  State  Legislatures  be  requested  to 
provide  by  law  for  tiie  investment  of  the  funds  in  the  hands  of 
executors,  adininistiators,  guardians  and  other  trustees  in  the 
bonds  of  the  Confederate  States. 

Mr.  McNeill  of  South  Carolina,  laid  upon  the  table  the  fol- 
lowing resolutions  : 

1st.  Resolved,  That  in  consideration  of  the  fact  that  there 
will  be  held  in  London,  during  the  next  year  a ''World's  Fair;" 
also,  that  the  productions  and  resources  of  the  Confederate 
States  are  comparatively  but  little  known  to  the  wovld;*.  it  is 
considered  by  this  Convention  desirable  that  the  governments 
of  the  several  States,  and  also  the  Confederate  States,  shall  take 
such  steps  as  will  place  them  before  the  world  in  a  proper  man- 
ner. .     •    . 

2d.  Resolved,  Thattlie  Governors  of  each   ofHhe  Confeilci- 


M  ^^d^f^^^Lmj 


ate  States  are  requested  to  appoint  at  once  suitable  persons  to 
make  such  selections  of  agricultural  products,*  native  woods, 
mineral  ores,  ttc,  as,  in  their  judgment,  will  best  accomplish 
the  object  desired,  and  make  such  arrangements  as  will  ensure 
their  proper  representation. 

Resolved,  That  a  copy  of  these  resolutions  be  forwarded  to 
the  Governors  of  the  several  States  of  the  Confederacy,  by  the 
President  of  this  Convention. 

The  committee  appointed  to  select  Vice  Presidents  for  the 
Convention,  reported  the  names  of  Williams  Rutherford  of  Geor- 
gia, Thomas  McNeill  of  South  Carolina,  J.  W.  Castens  of  Ala- 
bama and  George  K.  Walker  of  Florida,  which  report,  on  rao* 
tion,  was  adopted. 

J.  II.  II.  Washington  of  Georgia,  chairman  of  the  commit, 
tee  of  twelve,  announced  that  the  committee  had  not  been  able 
to  agree,  and  submitted  the  report  of  the  majority.  The" follow- 
ing minority  report  from  the  same  committee,  was  submitted 
by  Ex-Gov.  Broome  of  Florida. 

'   MINORITY  REPORT. 

Your  committee  charged  with  the  duty  of  presentingto  this 
Convention,  a  plan  for  securing  the  largest  amount  of  financial 
aid  to  the  Government  of  the  Confederate  States,  have  instruct- , 
ed  me  to  submit  the  foflowing  report : 

Without  entering  into  a  discussion  of  the  causes  which  have 
led  to  our  present  political  relations  to  the  balance  of  the  world, 
-we  would  simply  say^  that  we  are  citieens  of  the  Confederate 
States  of  America,  and  are  ready  to  respond  to  every  obligation 
d.ue  from,  good- and  loyal  citizens  to  their  Government.  The 
form  of -Government  adopted  by  the  Confederate  States,  com- 
mands, in  the  main,  the  hearty  approval  of  our  whole  people. 
Thd* President  elected  and  his  Constitutional  advisers  appoint- 
ed undier  the  Provisional  Government,  possess  the  confidence 
of  the  peojj(l^  to  an  extent  equalled  only  by  that  awarded  to  the 
Father  of  his  country,  and  the  patriots  called  into  his  councils 
in  the  earliest  and  purest  days  of  the  late  United  States  Govern, 
ment. 

The  war  which'bas  been  forced  upon  us,  we  recognize  as  the 
toflEspri^kg  of  abolition  fanaticism;  and  aided  by  an  organized  po- 
litical despotism  is  designed  to  destroy  the  property,  ancl  forever 


5 

to  crush  the  liberty  and  power  of  these  States.  The  issue  pre- 
sented is  absolute  submission  or  complete  subjugation.  That 
issue  has  been  accepted.  The  country  has  been  called  upon  to 
furnish  the  men  and  the  money  necessary  for  the  chastisement 
of  the  impudent  invaders.  The  call  has  been  answered  by  our 
young  men  to  an  extent  entirely  beyond  the  capacity  of  the 
Government  to  accept.  Xot  by  mercenary  hirelings,  but  by 
the  pride  and  flower  of  the  country.  Men  whose  bosoms  are 
filled  with  the  glorious  traditions  of  1776.  Men  who  are  ready 
to  ofter  their  lives  for  the  preservation  of  constitutional  liberty  ; 
and  of  all  that  is  lovely  and  endearing  in  home  and  its  affec- 
tions. These  are  the  men  who  constitute  our  Confederate  army; 
they  are  our  sons,  our  brothers,  our  neighbors,  our  friends  and 
ourselves.  It  was  to  consider  the  means  best  adapted  to  pro- 
vide the  money  necessary  for  the  support  of  such  a  Government, 
such  a  cause  and  such  an  army,  that  you,  gentlemen  cotton 
planters,  assembled  this  Convention  on  the  anniversary  of  the 
memorable  and  ever  glorious  4tli  of  July,  1770. 

Your  committee  find  themselves  happily*  relieved  from  the 
necessity  of  appealing  to  the  patriotism  or  liberality  of  the  cot- 
ton planters  present  or  absent,  in  behalf  of  this  great  object. — 
All  seem  ready  and  anxious  to  contribute  according  to  their  a- 
.bility.  Your  committee  will,  therefore,  devote  themselv.es  to 
the  development  of  a  plan  of  contribution,  which  in  fheir  judg- 
ment will  afford  to  the  Government  the  largest  possible  aid. 
It  has  been  proposed  that  each  cotton  planter  shall  agree  to 
deliver  to  his  factor,  to  be  sold  by  a  day  certain,  such  portions 
of  his  crop  as  he  can  spare  for  investment,  and  require  the  pro-, 
ceeds  investeil'in  the  Bunds  of  the  Confederate  States. <»f  Amer- 
ica.     J  .     . 

With  great  respect  for  the  wisdom  of  those  who  have  sug- 
gested and  advocated  this  -plan,  your  Committee  must  express 
a  doubt  of  its  entire  practicability.  Certainty  is,  at  this  time, 
a  necessity  with  the  Government.  To  what  extent  ca8.,thi3  plan 
be  relied  upon  with  certainty  ?  Let  us  see.  A  planter  who  makes 
one  hundred  bales  of  cotton  and  sells  it  for  twelve  cfents  per 
pound,  or  si.xty  dollars  per  bale,  will  have  , an  income  of  six 
thousand  dollars.  Suppose  such  a  planter  qhu  meet  his  actual 
expenses  with  two  thousand  dollars,  then  he  may  invest  tis  siii- 


-5*3- 


e 

plub  of  four  thousand  in  the  bonds  of  the  Confederate  States. 
On  the  other  hand,  >ui)i)08e  he  should  receive  for  his  crop  only 
five  cents  per  pound,  his  income  will  be  only  two  thousand  five 
hundred  dollars,  which  will  leave  him  only  five  hundred  dollars 
for  in\estment.  With  such  a  scale  of  jirices  the  investment  in 
the  Confederate  bonds  would  be  very  small:  neither  meeting 
the  wants  of  the  Government,  nor  the  ]>atriotic  desires  of  the 
]>eople. 

But  it  ma}'  be  said  that  such  a  j^rice  is  not  likely  to  prevail 
tor  the  growing  crop.  Your  comniittoo  hope  that  it  will  not, 
and  readily  concede  that  it  should  not.  They  know  that  the 
last  three  American  crops  have  averaged  over  4,100,000  b^^s  ; 
that  these  have  been  sold  at  fair  jirices,  and  have  been  insufiicient 
for  the  demand.  The  stock  now  remaining  un  hand  is  consid- 
ered sufficient  for  only  twenty  weeks  regular  consumption,  while 
middling  uplands  are  quoted,  and  scarcely  to  be  had  in  Liver- 
pool, at  7fd.  equal,  at  an  ordinary  exchange,  to  about  lo}  cents, 
and  are  now  worth  in  New  York,  about  14:V  cents  per  pound. 
The  growing  crop  is  conceded  on  all  hands  to  cover  a  less  area 
of  land,  than  that  of  the  year  1800,  and  is  not  likely  to  exceed, 
it  it  equals,  the  avei'age  product  of  the  last  three  years.  Under 
such  circumstances  we  should  ordinarily  be  justified  in  expect- 
ing a  very  high  range  of  prices  ;  but  the  circumstances  by  which 
we  are  now  surrounded  render  ordinary  rules  of  calculation  en. 
tirely  uncertain.  Should- the  blockade  of  the  cotton  ports  con 
tinue,  the  crop  cannot  be  sold  for  money,  exce])t  at  ruinously 
low  prices. 

Cotton  is  a  favorite  security  and  purchases  are  usually  made 
by  the  use  of  credits.  A  house  in  Savannah,  for  instance,  whom 
we  will  call  A.,  desires  to  pm'chase  one  thousand  bales  of  cot- 
ton. He  writes  to  his  friend  B.  in  Macon,  requesting  him  to 
purchase  it  for  him,  and  draw  upon  him  at  sixty  days  for  the 
amount,  and  enough  over,  to  cover  the  discount,  commissions, 
freight,  &c.,  all  of  which  is  promptly  done.  The  bank  desir- 
ing exchange  on  Savannah,  which  is  worth  a  premium,  readily 
discounts  the  draft,  and  thus  the  funds  are  raised  to  give  the 
])lanter  the  mone3'^for  his  cotton  ;  but  you  observe,  that  although 
a  cash  piirchase,  the  cash  is  borrowed.  B.  sends  the  cotton  for- 
ward to  A.,  that  he  may  dispose  of  it  and  get  the  money  to  pro- 


tect  his  draft.  A.  ships  the  cotton  to  Liverpool,  and  at  the  ma- 
turity of  B's  sixty  day  draft,  draws  upon  the  agent  or  partner  of 
the  Liverpool  house,  who  resides  in  New  York  or  New  Orleans 
at  sixty  days,  for  the  amount,  which  draft  is  a  lien  upon  the  cot- 
ton sent  forward.  The  Bank  in  Savannah  desiring  exchange  on 
New  York  or  New  Orleans,  to  sell  at  a  premium,  readily  dis- 
counts the  bill,  and  supplies  the  money  to  pay  B's  draft.  This 
draft  matures  in  New  York  or  New  Orleans,  and  then  the  a- 
gent  or  partner  draws  at  sixty  days  sight,  upon  the  house  in  Liv- 
erpool, and  discounts  the  dralt  with  some  Banker  or  merchant, 
who  wants  European  exchange.  Before  its  maturity  the  cotton 
is  sold  to  the  manufacturer,  or  exporter,  on  three  months  and 
ten  day's  credit,  and  his  note  discounted,  and  the  money  raised 
to  pay  the  draft. 

Thus  it  is  seen  that  the  one  thousand  bales  having  passed 
through  a  system  of  credits  covering  a  peiiod  of  nearly  ten 
months,  finally  furnishes  the  money  to  pay  for  its  own  original 
purchase,  and  yet  everybody  has  been  paid  at  maturity  ;  and 
tl.is  is  the  history,  substantially,  of  nine  out  of  every  ten  bales 
o!  cotton  raised  in  the  Confederate  States  of  America. 

These  various  credits  are  based  upon  the  cotton,  and  could 
not  exist  without  its  shipment.  Destroy  this  system  of  credit 
and  the  whole  cotton  crop  sold,  would  have  to  be  paid  for  in 
cash,  and  its  value  would  be  measured  by  the  avarice  of  a  few 
speculators  and  corporations,  who  might  chance  to  have  a  few 
millions  ot  dollars. 

Thus  it  is  seen,  that  with  our  ports. blockaded,  the  exporta- 
tion of  cotton  prohibited — the  basis  of  credit  destroyed,  and  our 
planters  bound  to  sell  on  a  day  certain,  the  prospect  of  a  large 
investment  in  Confederate  State  Stocks  is  by  no  means  flatter- 
ing- 

Your  Committee  however,  will  present  for  your  considera- 
tion a  plan,  which  if  adopted  by  the  Government,  they  think 
may  be  relied  upon  to  meet  its  financial  wants.  Instead  of  the 
planter  selling  his  cotton  for  bank  bills,  and  investing  them  ijn 
the  bonds  of  the  Confederate  States,  let  the  Governnient  enter 
the  market  as  a  purchaser,  at  a  minimum  price,  of  all  the  cotto^L 
offered  for  sale,  that  is  not  wanted  by  other  purchasers  at  or  a- , 
bove  that  price.  '  . 


8 

Let  the  price  established  as  a  ininimura  be  a  fair  one  ;  say 
the  average  price  paid  for  the  last  three  crops.  Let  middling 
cottons  be  assumed  as  the  basis,  and  tlie  price  be  graded  above 
and  below  as  is  now  done  in  regular  commercial  transactions. — 
No  derangement  need  be  experienced  in  the  management  of 
the  crop.  The  planters'  factors  would  sell  it  as  usual,  but  the 
Government  Agent  or  Sub-Treasurer  being  the  best  bidder, 
Avould  of  course  command  the  staple.  The  payment  should  be 
made  in  Treasury  notes  of  the  Confederacy,  of  denominations 
ranging  from  five  to  one  hundred  dollars,  having  five  years  to 
run,  and  should  be  made  the  general  circulating  medium.  They 
should  bear  a  small  interest,  and  be  convertible  into  8  per  ceiit. 
bonds  at  the  pleasure  of  the  holder.  These  Treasury  notes  be- 
ing recei%'ed  at  par  by  the  cotton  planters  would  become  imme- 
diately a  paper  circulation  of  uniform  value  throughout  the 
Confederate  States,  and  would  be  a  credit  equal  to  gold  and  sil 
ver  to  the  Government  in  the  purchase  ot  all  Commissary  and 
Quarter  Master's  stores — in  the  payment  of  troops,  and  in  dis- 
charge of  the  pressing  engagements  of  every  description.  The 
fact  announced  that  the  great  cotton  planting  interest  of  the 
country,  having  $200,000,000  vegetable  gold  almost  ready  tj 
gather,  had  voluntarily  placed  it  at  the  disposal  of  the  govern- 
ment, receiving  as  cash  their  Treasury  notes  in  payment,  and 
that  such  aid  had  been  accepted,  would  exert  a  moral  efiect  upon 
the  European  nations  which  it  would  be  difficult  to  estimate. — 
The  Government,  backed  by  200,000,000  dollars  in  cotton,  which 
to  the  world  has  become  a  necessity  nearly  equal  to  that  of 
bread,  would  be  able,  with  such  a  concentration  of  commercial 
power,  to  control  the  question  of  commercial  treaties  with  tiie 
principal  commercial  nations  of  the  world.  Our  credit  would 
immediately  be  established  in  the  principal  money  marts,  and 
a  peace  upon  our  own  terms,  be  con(|uered  at  an  early  day. 

But  the  advantages  to  result  to  our  people  individually  would 
be  scarcely  less  important  than  those  that  would  l)c  conferred 
upon  our  Government. 

The  crop,  in  this  way,  instead  of  remaining  in  the  planter's 
Gin  House,  or  being  locked  up  on  jilanter's  accouht  in  his  fac- 
tor's stores,  would  be  actually  sold,  and  the  proceeds  go  into  ac- 
tive circulation — thus  enabling  the  planter  to  pay  his  merchant, 


9 

the  merchant  to  pay  his  banker,  and  the  banker  to  discharge  his 
obligations  to  the  community.  The  country  would  show  its  capa- 
city for  prosperity  even  in  war,  and  while  failure  is  legibly  writ- 
ten upon  the  financial  schemes  of  our  enemies,  our  Government 
and  people  would  show  a  strength  and  energy  unequalled  by 
any  young  Government  of  which  history  has  yet  spoken.  !N^or 
would  the  cotton  planter  be  alone  benefitted.  The  establish- 
ment of  a  Treasury  note  currency  upon  such  a  basis,  would  en- 
able the  Government  to  pay  fur  the  vastsupplies  of  grain, flour, 
bacon,  pork,  forage,  &c.,  necessary  for  the  vigorous  prosecution 
of  the  war,  in  a  currency  equal  to  specie,  and  tlius  distribute  its 
benefits  throughout  the  entire  country. 

Such  a  system  your  Committee  believe,  would  effectually 
concentrate  the  cotton  crop  where  it  could  be  made  most  effect- 
ive for  our  political  and  commercial  benefit,  and  at  the  same 
time  would  impart  life,  energy,  and  prosperity  to  the  various 
and  multiplied  interests  of  the  country  at  large.  They,  there, 
fore,  recommend  the  adoption  of  tiie  following  resolutions  : 

Resolved,  That  in  the  opinion  of  this  Convention,  the  best 
and  most  extensive  aid  that  can  be  given  by  the  cotton  planters 
to  the  Government  financially,  will  be  by  selling  to  their  agents 
the  entire  cotton  crop,  at  a  fair  price,  say  the  average  price  of 
the  last  three  crops,  and  receive  in  payment  for  the  same,  their 
Treasmy  notes,  bearing  a  low  rate  of  interest,  and  to  be  used  as 
a  circulating  medium,  and  to  be  converted  into  eight  per  cent. . 
bonds  at  the  option  of  the  holder. 

Resolved,  That  should  the  Government  decide  to  enter  the 
market  as  is  here  suggested,  we  pledge  ourselves  to  sell  our  en- 
tire crop  of  cotton  for  the  said  Treasury  notes,  and  to  use  our  best 
efforts  to  induce  every  cotton  planter  in  the  country  to  do  tiie 
same. 

Resolved,  That  should  the  Government  decline  to  enter  the 
market  as  a  purchaser,  we  then  recotnmend  to  our  fellow  plant- 
ers throughout  the  Confederate  States,  to  invest  their  whole  in- 
come, above  actual  expenses,  in  the  bonds  or  Treasury  notes  of 
the  Government. 

Resolved,  That  this  Convention  will  send  delegates  to  Rich- 
mond to  confer  with  the  Government,  and,  if  possible,  procure 
their  assent  to  the  proposition  contained  in  the  first  resolution. 

JAMES  E.  BROOME,  Chairman. 

A  minority  report  from  the  committee  of  twelve,  not  differ- 
ing materially  from  the  majority  report,  was  also  submitted  by 


lO 

W.  K.  Call  of  Florida,  but  snbseqaeutly  withdrawn,  after  the 
majority  report  had  been  modified  and  presented,  as  follows  : 

MAJORITY  REPOllT. 

The  Committee  of  Twelve  appointed  to  consider  and  present 
to  the  Convention,  the  best  means  of  aiding  the  Government  of 
the  CoufoJerate  States,  begs  leave  to  report  the  following  reso- 
lutions, which  we  think  cover  the  whole  ground,  and  we  re- 
spectfully recommend  their  passage  bj'  the  Convention. 

1st.  Jlcsolved.  That  we  do  hereby  declare  our  willingness 
to  aid  the  G'lvernnieMt  with  the  entiix'  Cotton  croj),  if  the  same 
shall  be  needed  fur  its  use. 

:iid.  Resulved,  Tiiat  we  recommend  tn  the  Cotton  Planters 
of  the  several  States,  to  hold  meetings  in  their  counties  and 
pledge  thenibelvos  to  aid  the  Government,  with  such  part  of  the 
growing  crop  as  may  be  required  for  that  ]>urpose. 

3d.  Resolved,  That  we  recommend  to  the  Congress  of  the 
Confederate  States  to  consider  and  devise  S(»ine  system  by  which 
the  Cotton  and  other  crops  may  become  available  in  support  of 
the  credit  of  tiie  Government,  either  as  a  secui'ity  fur  li>ans  of 
money  to  the  Government,  or  as  a  basis  i'ov  b*>nds  and  treasury 
notes  issued  thereby. 

4th.  Resolved,  That  if,  in  the  judgment  of  Congress,  the 
purchase  and  control  of  Cotton  and  other  products  be  deemed 
advisable,  we  recommend  an  issue  of  the  pulilic  credit  for  tiiat 
purpose,  in  the  purchase  by  the  Governuient  of  such  partoi-tlie 
whole  of  our  exportable  products,  as  ma}'  bo  deemed  ex]>edient 
by  Congress. 

r>th.  Resolved,  That  we  recommend  to  the  Congress  of  the 
Confederate  States,  to  authorize  the  issue  of  Treasury'  notes  of 
denominations  suited  for  circulation  as  currency,  for  an  amount 
equal  to  the  exigencies  of  the  Government.  Such  notes  to  l)e 
paid  out  as  money  in  payment  of  all  Government  dues,  and 
made  receivable  for  all  taxes  and  duties,  and  convertible  into 
eight  per  cent,  bonds  of  the  Confederate  States,  at  the  ])leasure 
of  the  holder. 

Oth.  Resolved,  That  we  recommend  the  several  Confederate 
States  and  the  people  thereof,  that  tliey  receive  and  i)ay  out  at 
par  the  Treasury  notes  of  the  Confederate(TOVcrnment,  and  that 
it  be  recommended  to  the  Cotton  rianters  and  all  other  citizens 
of  the  Confederate  States,  to  pledge  themselves  to  receive  said 
Treasury  notes  at  ])ar  value,  for  their  cotton,  and  other  commod. 
ities,  and  for  all  the  uses  of  currency. 

Tth.  Resolved,  That  we  recommend  to  the  planters  and  farm- 
ers in  the  Confederate  States,  to  invest  at  least  one-half  of  the 


11 

proceeds  of  the  sale  of  their  entire  crops  in  the  eight  per  cent, 
bonds  of  the  Confederate  States;  and  to  Capitalists  and  persons 
having  mone}^  to  lend  that  they  invest  in  like  manner  in  these 
bonds. 

A  long,  able  and  interesting  discussion  upon  these  two  re- 
ports took  place—  participated  in  by  Messi's.  C.  G.  Baylor,  Geo. 
K.  Walker,  Duff  Green,  Gen.  Whitfield,  J.  E.  Broome,  A.  S. 
Atkinson,  J,  H.  R.  Washington,  W.  K.  Call,  and  other  mem. 
bers  of  the  Convention,  and  after  a  test  vote,  the  minority  re- 
port was  withdrawn,  and  that  of  the  majority  adopted. 

The  resolutions  laid  upon  the  table  during  the  moftiiug  ses- 
sion, by  Hon.  A.  E.  Cochran  of  Georgia,  were  taken  up,  and 
after  some  discussion,  adopted. 

The  resolutions  laid  upon  th<^  table  by  T.  McNeill,  of  South- 
Carolina,  were  taken  up  and  ado])ted. 

The  Committee  of  twelve,  through  their  Chairman,  J.  H.  R. 
Washington,  presented  the  following  supplemental  report,  which 
was  adopted  : 

Your  committee  charged  with  the  duty  of  presenting  to  this 
Convention  apian  for  securing  the  largest  amount  of  financial 
aid  to  the  Government  of  the  Confederate  States,  have  instruct- 
ed me  to  submit  the  following  supplemental  Report : 

One  of  the  jiapers  referred  to  there,  is  an  extended  argument 
by  General  Dufi  Green,  accompanied  by  statistical  tables  bear, 
ingupon  the  subject  of  finance  generally,  and  the  value  of  con. 
vertible  treasury  notes  particularly.  From  the  experience  and 
ability  of  the  author,  and  the  great  labor  bestowed  upon  the  sta- 
tistical department,  yonr  committee  believe  that  it  embodies  a 
large  mass  of  valuable  information,  and  recmmend  that  the 
same  be  published  under  the  direction  of  the  officers  of  this 
Convention.     Ado])ted. 

J.  H  R.  Washington  of  Georgia,  presented  the  following 
resolution,  which  was  adopted  : 

Resolved,  That  when  this  Convention  adjourns,  it  will  ad- 
journ to  meet  in  this  city  on  the  15th  October  next,  and  that  we 
invite  the  Agriculturists  of  every  State  and  cuunty  in  the 
Confederate  States,  to  meet  with  us  on  that  occasion,  and  unite 
with  us  in  presenting  such  other  and  further  measures  tV)r  the 
support  of  i;ur  Government  as  may  be  just  and  proper. 

The  following  resolution,  presented  by  A.  S.  Atkinson  of 
Georgia,  was  adopted  : 

Resolved,  That  J.   II.  R.   Washington,  T.  G.  Holt.   E.  D. 


12 

Huguenin  and  A.  E.  Cochran,  be  a  committee  with  power,  if 
in  their  opinion  the  public  exigencies  require  it,  to  call  a  meet, 
ing  at  an  earlier  day. 

Mr.  Baylor,  of  Georgia,  presented  the  following  resolution, 
which  was  adopted : 

Resolved,  That  a  c<»py  of  the  proceedings  of  this  Convention 
be  transmitted  to  the  President  of  the  Cutton  Planters' Conven- 
tion of  Georgia,  by  which  body  the  meeting  ot  this  Convention 
was  first  suggested. 

The  Convention,  then  after  a  vote  of  thanks  to  its  officers,  and 
the  passage  of  a  resolution,  requesting  the  new8pa])crs  of  the 
Confederate  States  to  publish  the  proceedings,  adjourned  to 
meet  in  Macon,  on  the  15th  day  of  October  next. 

J.  M.  CHAMBERS,  President. 

John  J.  Guesiiam,  ) 

Thurston  R.  Bloom,       j-  Secretaries. 

James  T.  Nisbet,  ) 

Remarks  on  the  proposed  issue  of  Treasury  Notes. 

The  Confederate  States  propose  to  contract  a  loan  of  fifty 
millions  of  dollars,  of  which  twenty  millions  of  dollars  to  be  in 
the  shape  of  Treasury  Notes,  without  interest,  but  receivable  in 
payment  of  |)ublic  dues  and  convertible  into  Bonds,  bearing 
eight  per  cent,  interest.  It  is  proposed  that  the  States  and  cities, 
towns  and  counties  of  the  several  States  shall  make  these  notes 
receivable  for  taxes,  and  that  the  Banks  and  Railroad  Compa 
nies  shall  receive  them  and  pay  them  out  as  currency.  The 
question  to  be  considered  is.  Can  such  notes  be  made  a  curren- 
cy equal  to  specie  i 

The  constitution  gives  to  Congress  power  '•  to  coin  money, 
and  regulate  the  value  thereof,  and  of  foreign  coin,"  and  de- 
clares that  no  State  "  shall  make  anything  but  gold  and  silver 
coin  a  tender  in  payment  of  debts."  Tlierefore,  nothing  but 
gold  and  silver  is  money.  Vet  Bank  notes,  which  are  paid  on 
demand  in  specie,  are  accounted  and  used  as  money  ;  and  such 
notes  have  again  and  again  been  so  used,  even  when  the  Banks 
issuing  them  were  authorized  by  law  to  suspend  specie  payment. 
The  Bank  of  Ehgland  was  required,  by  act  of  Parliament,  to 
suspend  in  171)7,  and  did  not  resume  until  ls2o  ;  and  the  Banks 
in  the  United  States  have  been  permitted  to  suspend  payment 


13 

so  often,  and  for  such  periods,  that  the  confidence  of  the  public 
in  Bani^  notes,  ;ind  the  value  of  a  paper  currency,  must  be 
admitted. 

Adam  Smith  says  : 

"  The  gold  and  ailver  which  circulates  in  auy  country,  and  by  means  of  which  the  pro- 
duce of  land  and  labor  is  annually  circulated  and  distributed  to  the  proper  consumers,  is, 
in  the  same  manner  as  the  ready  money  of  the  dealer,  all  dead  stock.  It  is  a  very  valuable 
part  of  the  capital  of  the  country,  which  produces  nothing  to  the  country.  The  judicious 
operations  of  banking,  by  substituting  paper  in  the  room  of  a  great  part  of  this  gold  and 
silver,  enables  the  country  to  convert  a  great  part  of  the  dead  stock  into  active  and  produc- 
tive stock,  which  produces  something  to  the  country.'" 

Again,  he  says  : 

"  A  paper  money,  consisting  in  bank  notes,  issued  by  a  people  of  undoubted  credit, 
payable  on  demand,  without  any  condition,  and  in  fact  always  readily  paid  as  soon  as  pre- 
sented, is  in  every  respect  equal  in  value  to  gold  and  silver  money." 

Ricardo  says : 

"If  there  were  perfect  security  that  the  power  of  issuing  paper  money  would  not  be 
aljused;  that  is,  if  there  were  perfect  security  for  its  being  used  in  such  quantities  as  to 
preserve  its  value  relatively  to  the  mass  of  circulating  commodities  nearly  uniform,  the 
precious  metals  might  be  entirely  discarded  from  circulatiou.'' 

An  able  British  writer  has  said  : 

"A  variety  of  circumstances  contribute  to  make  taxation  oppressive  at  dift'erent  periods  ; 
such  as  embarrassed  trade,  depreciated  prices  of  productions,  dearness  of  corn,  a  panic  in 
the  money  market,"  &c.;  and  adds:  "the  only  remedy  for  such  a  state  of  things  is  a 
general  distribution  of  labor,  a  good  supply  of  corn,  and  a  money  market  undisturbed  by 
continual  fluctuations." 

The  constitution  not  only  gives  to  Congress  the  power  to 
coin  money  and  regulate  its  value,  but  also  "to  fix  a  standard 
of  weights  and  measures."  The  purpose  of  giving  these  pow- 
ers to  Congress  was  to  secure,  as  far  as  practicable,  a  certain, 
fixed,  value  of  property,  by  preventing  fluctuations  in  the  value 
of  money.  It  was  to  enable  the  seller  to  know  how  much  he  is 
to  receive,  and  the  purchaser  to  know  how  much  he  is  to  give. 
It  was  to  establish  justice  and  right  in  the  transactions  between 
man  and  man  ;  and  the  States  were  forbidden  to  make  any- 
thing else  than  gold  and  silver  a  tender  in  payment  of  debts, 
because  it  was  supposed  that  the  limited  quantity  of  these 
metals  caused  them  to  fluctuate  in  value  less  than  other  com- 
modities. 

But  it  is  apparent  that  in  forbidding  the  States  to  make  an}^- 
thing  else  than  gold  and  silver  a  tender  in  payment  of  debts, 
it  was  no  less  the  purpose  of  the  constitution  to  strengthen  and 
increase  the  value  of  credit,  than  to  give  a  certain  and  fixed 
value  to  money.  For  as  there  could  be  no  debts  without  a 
previous  use  of  credit,  the  regulation  which  requires  the  pay- 
ment to  be  made  in  gold  and  silver  coin,  the  value  of  which 
had  been  regulated  by  Congress,  tends  to  give  the  same  value 
to  credit  as  to  these  coins. 

The  Confederate  Staties  propose  to  borrow  money.     Have 


14 

they  the  means  ul  payment,  and  will  they  pay  as  they  premise 
to  do?  We  believe  that  the  people  of  these  States  have  ample 
means  \vithin  themselves  t«>  advance  to  themselves  all  the  I'unds 
which  they  may  rojuire,  and  that,  as  the  debt  will  be  dne  from 
themselves  to  themselves,  there  can  be  no  cause  to  apprehend 
that  they  will  nut  pay  themselves.  If  the  value  of  credit  de- 
pends on  the  ability  of  the  debtor  to  pay  and  the  certainty  of 
])ayment,  when  the  debt  becomes  due,  and  the  people  of  the 
Confederate  States  become  thcnisolves  the  creditors  of  them- 
selves, then  there  could  be  no  strongcT  basis  of  credit  than  that 
of  the  proposed  loan. 

The  use  of  public  credit  is  of  comparatively  recent  origin. 
The  extent  to  which  it  may  be  used  by  an  enlightened  people, 
is  illustrated  by  the  progress  of  the  Purlu-  Dkut  of  England. 
We  are  indebted  to  Ayres'  Financial  liegister,  ot  1857,  for  a 
series  of  Tables  derived  from  official  sources.  The  following 
table  shows  the  aggregate  amount  of  the  Public  Debt  of  the 
United  Kingdom,  at  different  periods,  witli  tlic  nmonnt  of  the 
public  revenue. 

nebi.  liiterost.    Pub.  licvciiuc 

Public  Debt  at  the  Ruvoluiion  iu  ICSS $ 3,321,:un  *i;i9,;W5      $10,0(lii.42j 

Debt  contracted  diiriuf;  the  rcitrn  of  Willliim  III..  7s,(j52,l!t5  (•.,35r>,4:i-) 

"    attheaccegsiou  oft^.uceii  Anue,  liii;((2 si,<)73,510  0,rj5J,7liO         l!>,4Tli.00(t 

'•    contracted  durin;;  thif  rcigu l8S,t.5:j,30.'i  10,20-.2  (kS(i 

■    at  the  accession  of  George  I.,  in  1714 -JtO.T-it^SlS  1C,75(;,&10        aiVlMMWO 

••    reduced  durinj,' this  reign 10,2()5,tilO  l)t>9,035 

'•    at  thcaccei-sion  orGeor2;c  II..  iul727 'J(K),401,17r.  IC.,087,80.5        :W,!SlO,000 

•'    reduced  during  12  years  jjcace,  ending  17:!ii. .  a.'"),(i88,()litl  1,207,(5.30 

'•    atcomiuencenicnt  of  >^pauish  war  inl7-Jt» . ..  3:W,77.S,115  14,820,17.5        34,:J70.000 

"    increased  during  seven  years"  war 156,6t».%4 1.5  .'>,484,8!).5 

"    atthe  end  of  the  Spanish  war.  in  174s .391,4Cfi,.5(R)  20,80.5,070        31.(il,5,000 

•'    reduced  during  eight  years  of  peace lti,tJ07,3(Hi  3,321,385 

•  at  commencement  of  war  in  l'..5(i 372.S.59,20<i  1(!,!»83,C85        a>,(A5,000 

'■    increased  during  seven  years  of  war M(>0,.55.5,020  12.220,.520 

••  at  the  end  of  the  war,  in  17fi:; 7315,111,220  20.20-1,205         12,t;i7.-.'20 

■•  reduced  during  thirteen  years  of  peace..   .   .  53,0i»S,9().5  1.S2(),000 

'•  at  opening  of  the  American  war,  iu  1775 079,715,255  27,;tei4,205        .51.327,000 

"  increased  during  eiglit  years  of  war !)12,709,095  19,215,420 

••  at  the  end  of  the  American  war I,192,424,:i50  H;,.599,fi25        .59,820,000 

'•  reduced  during  ten  year.-  of  peace 23,75(1,305  717,945 

•'  at  commencement  of  French  war,  in  1793...  1,1G8,(>()S,045  l.5,8Sl,C.SO        S{,20-1,070 

•  contracted  during  Frencli  war.  ending  1815..  3,()5.5,444,100  115,244,7-10 

••     of  tlie  Inited  Kingdom  at    the  consolida- I      i  o.ii  ii.)  >i(i-,       ic.l  1»,;  i-w       -i-n  onn  n<vi 
lionofj:uglishaiidIrislil-;x(li.Miuerlnl817)'      '•*>~^-il--0-^       11.1.1,0,120       .).0,000,000 

The  entire  amoimt  of  the  public  debt  of  the  United  King- 
dom is  made  up  of  several  distinct  items,  under  the  heads  of 
Funded  Debt,  in  the  shajic  of  loans  contracted,  or  bj'  funding 
securities,  of  terminable  and  life  annuities,  and  of  the  unfunded 
det)t,  consisting  of  Exchequer  bonds  and  Exchequer  bills.  The 
following  Table,    compiled    from    Pailiamentary    Documents, 


15 

shows  the  total  amount  of  debt  funded  and  unfunded,  and  the 
total  annual  charge  from  1820  to  1855,  inclusive. 

Y,         Total  am't  Debt,         Total  aiimial  y  Total  ara"t  Debt,  Total  auiiual 

funded  &  unf'd.  charge.  funded  &unfd.  charge. 

1820  $4,l(i-2,()5(!,050  $158,198,8^5  ItSSS  $.3,926,868, 7(W  $145,34S,0'(5 

1821  4,i:i4,39(i,58.5  15i»,3:M,500  ]83i»  a,92:),562.6W  146,791,005 

1822  4,164,056,475  148,596,190  1840  :i.9:}T,240,.375  145,856,905 

1823  4,132,216,82(1  148,020,035  1841  3,954,373,040  147,077,;553 

1824  4,067,(i08,.36O  145,784,065  1842  3,056,252,200  146,281,860 

1825  4,030,612,.3.35  144,099,895  1843  3,932,881,960  145,221,4.35 

1826  4,041, S37,9.'50  145.487,170  1844  3,937,990,725  141,017,495 

1827  4,025.118,710  144,857,700  1845  3,92.5,265,110  140,246,.525 

1828  3,999,897,700  144.587,025  1S46  3,914,594,920  1.39,592,2.^5 

1829  .3,983,712,410  144.009,615  1S47  3,951,741,755  140,780,090 

1830  3,915,483,2:^0  138,720,245  18-48  3,959,046,li9()  112,2;«,300 

1831  3,905,476,170  1.39,980,9.30  1.S49  3,954,6.35,08.")  110,842,255 
18.32  3,898,982,745  1.39,859,140  1.^50  .3,935,145,810  139.301,650 

1833  3,897,828,915  140.767,835  1S.51  3,914,;M6,91()  i:to,910,810 

1834  3,860,9M,245  1 39,08:3,4:J5  lS.-)2  3,896,826,020  138,578,970 
18;i5  3,937,632,330  1  W,8.37,450  1853  3,854,115,005  137,302,045 
18.36  3,941,992.8.50  144,525,565  IS.Vl  3,87:3,986  090  1:35,466,700 
1837  3,931  ..598,690  116,665,740  1855  4,017,476,915  110,929,790 

We  know  that  many  persons,  speculating  on  the  immense 
weight  of  the  public  debt  of  England,  have  anticipated  her  nation- 
al bankruptcy;  but  it  is  an  important  fact  that  the  people  of  Eng- 
land are  themselves  the  creditors,  as  well  as  the  debtors,  and  that 
they  are  enabled  to  bear  this  immense  burden,  great  as  it  is, 
because  the  immense  sums  paid  by  themselves  as  taxes,  are 
received  by  themselves  as  dividends.  This  fact  is  so  important 
as  illustrating  the  capacity' of  an  industrious  and  intelligent  peo- 
ple to  absorb  a  domestic  public  debt,  that  we  give  a  table,  show- 
ing the  number  of  persons  entitled  to  receive  dividends  on  the 
public  debt  of  the  United  Kingdom,  which  proves  that,  large 
as  that  debt  is,  it  has  been  absorbed  and  is  held  by  the  masses 
— by  the  persons  of  small  incomes — by  the  people,  who  have 
placed  their  surplus  earnings  in  that  fund,  as  a  safe  and  per- 
manent investment,  and  who  have  thus  become  inleir=ted  in 
the  stability  of  the  government.    There  were,  in  1856. 

185,181  persons  entitled  to  dividends  of $25  and  inid.  i 

86.491  do.  "                  "           " 50  am;.,      aing  $25 

179,884  do,  "     250    "               '  50 

46,596  do.  •            ■     500    "             ■'  250 

26,201  do.  "     1,000    '•             '•  500 

7,400  do.  •'     1,.500    "             ■■  1,000 

4,981  do.  •            ■■     2,500    '•              ••  l,.50O 

2,291  do.  ■•                   ■■            ••     5,000    '•              ••  2,.500 

780  do.  - 10,000    ■'  '■  5,000 

448  do.  ■'                              ••      uxcccdiuy  10,000 

(^riving  540,208  as  the  number  of  all  classes  entitled  to  dividends. 

As  a  further  illustration  of  the  capacity  of  a  people  to  place 

large  sums  in  the  shape  of  a  funded  debt,  bearing  a  low  rate  of 

interest,  we  refer  to  the  Savings  Banks  of  Great  Britain  and  Ire- 


24fl,876 

do. 

169,638 

do. 

122,787 

d«i. 

75,501 

do. 

130,154 

do. 

ia5,614 

do. 

51.459 

do. 

8(;,22<« 

do. 

41.285 

do. 

27,076 

do. 

16,508 

do. 

25.200 

do. 

1,480 

do. 

16 

land.  Tbe  first  Savings  Bank  originated  in  l.SO-t  with  a  woman, 
Mrs.  Priscilla  "Wakefield — who,  in  charity,  agreed  to  receive 
pennies  from  the  laboring  poor  during  the  summer,  to  he  repaid 
at  Christmas  with  5  per  cent,  interest.  The  sums  deposited  in 
Savings  Banks  had  so  increased  that  Parliament  required  the 
amounts  to  he  placed  under  the  control  of  commissioners,  by 
whom  it  was  invested  in  the  public  debt;  and  the  following 
statement  shows  the  number  of  depositors,  with  the  amuunt  of 
deposits  in  November,  1S55.     There  were 

180,110  persons  depositing  not  more  than —      $5  making $-2is:i.590 

"  5  and  notcscecdiug  $25 :1.170,70;) 

"  ....      25    ••      '•            "             50 6,b-95,a65 

"   ....      50    "      !'            "             75  7.345,605 

"   ....       75. 100 6.474,285 

"   ....     100    "      "            •'           150 IS.-'iDO.OSO 

"  ....     150     "      '•            "           200 ]7,671.M5 

"     ...     200    "    .  '»           "           250 11,416.850 

"   ....     2.50    "      '•            "           •■VH) 26,187  520 

"   ....     3,50    "      "            ■•           .500  17,88!l.015 

"   ....     500    ' 676 15.01.3,.34O 

"...     575    "      "            ■•           •(50 11,247.265 

•'....     7,50    "■.    "            '•        1,000 81.422,480 

depositing  more  than 1,0(10. . . .' 1,655,410 

1,281,626  individuals  who  deposited f  l(il,24;j,220 

14,148  charitable  institutions,  which  deposited 3.:i86,l'.Hl 

8,758  friendly  societies,  which  deposited 0,686,265 

1,304,&"3  total  number  of  depositors,  who  deposited $171,31,5,675 

These  depositors  receive  but  2.94  per  cent,  per  annum  as 
interest — the  difference  between  3  per  cent,  and  2.!>4:  per  cent. 
(a  fraction  more  than  one  half  of  one  tenth  of  one  per  cent.)  be- 
ing deducted  fur  tiie  manai^ement  of  the  fund.  Surely  if  the 
working  classes  of  Great  Britain  can  absorb  so  large  a  part  of  a 
funded  debt  of  more  than  four  thousand  millions  of  dollars, 
bearing  an  interest  of  three  percent.,  and  tlie  depositors  in  the 
Savings  Banks  can  place  to  the  use  of  the  government  more  than 
one  hundred  and  seventy  millions,  at  less  than  three  ])er  cent, 
interest,  the  people  of  the  Confederate  States  can  absorb  a  sum, 
bearing  interest  at  the  rate  of  eight  per  cent.,  much  more  than 
sufficient  to  pay  the  whole  expenditures  of  the  government  for  a 
longer  period  than  any  probable  duration  of  the  war.  In  that 
case,  all  that  will  be  required  in  taxes  will  be  a  sum  sufficient 
to  pay  the  interest  on  so  much  as  may  be  funded  ;  for  it  should 
be  borne  in  mind  that  to  the  extent  that  these  notes  are  used  as 
currency,  they  should  bear  no  interest,  and  to  that  extent  their 
issue  will  diminish  taxation.  Thus,  if  $200,0U0,U00  be  used  as 
currency,  the  saving  of  interest  will  be  8  per  cent,  or  $16,000,000 
per  annum,  which   saving  will  be  to  the  whole  people  in  the 


17 

proportion  which  they   would  otherwise  be  required  to  pay 
taxes. 

A  more  significant  feature  of  the  financial  strength  of  the 
people  of  England  is,  that  during  the  war  Vith  France,  they 
advanced  as  loans  and  subsidies  to  Hanover,  Hesse  Cassel,  Sar- 
dinia, Prussia,  Hesse  Darmstadt,  Baden,  Germany,  Brunswick, 
Portugal,  Prince  of  Orange,  Bavaria,  Russia,  Sweden,  Spain, 
Sicily,  Austria,  Morocco,  Denmark,  Holland,  and  to  France !! 
the  sum  of  $301,047,813. 

The  imagination  may  well  be  startled  at  the  magnitude  of 
these  sunis,  and  accustomed,  as  we  have  been,  to  consider  the 
Bank  of  England  as  the  Regulator  of  the  monetary  system  and 
credit  of  the  world,  we  naturally  assume  that  it  is  to  the  finan- 
cial strength  and  great  resources  of  that  Bank  that  the  people 
of  England  are  indebted  for  the  ability  to  sustain  the  weight  of 
such  a  burden  of  taxation.  We  are  the  more  inclined  to  do  this 
because  it  is  known  that  the  Bank  is  the  financial  agent  of  the 
.government,  and  that  Parliament,  in  X797,  passed  an  act  requir- 
ing the  Bank  to  suspend  specie  payment  as  a  means  of  enabling 
the  Bank  to  aid  in  sustaining  the  public  credit.  In  this  connec- 
tion, the  following  Table,  showing  the  equivalent  of  three  per 
cent,  stock  for  the  amount  of  debt  funded,  the  stock  created  for 
£100  in  money,  the  market  value  of  the  paper  Pound  in  gold, 
and  the  value  per  cent,  of  the  paper  currency,  with  the  average 
circulation  of  Bank  of  England  notes,  is  given. 


Amount  of   ! 
debt  fui3(ie<^. 

Equivalent  in 

Stock  creat- 

Mark'tv'lne| 

Market 

raliie  i  Av'raae  cir*u- 1 

Years 

three  per  cent. 

,«!  for  £100, 

of paper 

percent. 

3fpa- 

lationof  Bank 

slock. 

i  in  money. 

£  in  gold. 

[ler  ( 

tirrency. 

of  Eng.  notes. 

i: 

£ 

£ 

s.     d. 

£. 

X~ 

d. 

£.. 

1800 

20.r)(.Hi.inHi 

32,18.5,000 

168.50 

.     20    0.0 

lOU 

d 

0 

1      1.5,160,000 

ISOl 

:}(),!•!  11.150 

(;3..578.100 

174.54 

18    3.8 

91 

12 

4 

1      15,800,000 

1802 

•J5,00l  1.01)0 

.•!-J.'.)!)(l.»i:«) 

132.17 

18    6.5 

92 

14 

2 

i      l(i,427,000 

1803 

12.(K)i(  OHO 

■^0.  I^:!.;«0 

173.55 

19    .5.fi 

97 

(> 

10 

1      10.500,000 

IWM 

14.51H),(I()0 

2(i,3!)0.(){MJ 

185.00  , 

19    5.6. 

97 

6 

10 

:       17,406,000     : 

1S05 

22.501),  100 

41,S(X),01H) 

177.20 

19    5  6 

97 

0 

10 

10,876,000     1 

\  180fi 

2O,0O0.0lKI 

33,200,000 

107.70 

19    5  6 

97 

6 

10 

16,791,(K)0     1 

1807 

15,700.000 

24,71)8,2!  10 

1.50.20 

19    5.6 

97 

6 

10 

'      16,705,000 

1  1J»8 

14,500,000 

23,530,022 

'       102.07 

19    5.6 

97 

6 

10 

17,128,000 

1809 

22.532,100 

30.218,740 

101.30 

19    5.6 

97 

6 

10 

18.017,000 

1  1810 

21,711,000 

33,112,100 

152.07 

17  6.| 

18  5.1 

86 

10 

K 

,      22,541,000 

1   1811 

24,000,000 

30,721,520 

l(iH..53 

92 

3 

2 

1      23.282.000 

181  a 

34.721,325 

.57,198.3,S0 

180  0(1 

16    8  7 

79 

5 

3 

i      28,437,000 

ISW 

04,755,700 

118,73fi.(i!»0 

184.87 

15    5.4 

77 

2 

0 

'      24,023,(KK)     1 

1814 

24,007,400 

30,839,930 

154.17 

14  11.7 

74 

17 

(1 

i      26,901,000     ' 

1815 

54.l:!5,58!» 

102,787,340 

191  ..52 

16    7.8 

83 

3 

9 

!      26,887,000 

1810 

16    7.8 

83 

5 

9 

26,574,0(K> 

IMT 

10    5.6 

97 

0 

10 

28,274.000 

ISl^t 

10    5.6 

<>7 

0 

10 

1      27,221.000 

1810 

19    13 

95 

11 

0 

25,227,000 

1S-i() 

19    5.8 

97 

8 

0 

23,569,000 

1821 

^ 

20    0.0 

100 

0 

0 

1      22,471,000 

1 

These  tables  show  that  in  ISOO,  three  years  after  the  Bank 


18 

of  England  bad  suspended  specie  payment,  the  bank  note  was 
at  par,  althonfili  the  ]>nltlic  credit  was  T.s^  per  cent,  below  par; 
and  that  although  the  value  of  the  paper  pound  was,  in  1814, 
reduced  to  14  shillings  11.7  pence,  it  was  again  at  par  in  1821, 
although  the  Bank  did  not  resume  specie  payment  until  1825. 

Another  hti  iking  fact  is,  that  whilst  the  average  Je|>rociation 
of  tbe  Bank  of  England  notes,  Jis  compared  with  gold,  was  less 
than  two  per  cent,  the  depreciation  of  the  public  credit,  as 
c<jmparc'd  with  the  bank-notes  was  ♦17.60  per  cent.  Yet  in 
180(1  the  whole  capital  of  the  Bank  was  but  $o>i,212,0u0,  which 
was  then  increased  to  $72,7(;5,000,  of  which  $70,000,000  was 
invested  in  the  very  securities,  which  were  thus  depreciated. 
This  fact  has  a  most  impoitnnt  In-aring  on  the  proposed  issue 
of  Treasury  notes. 

It  will  be  seen  thai  a  iai;:;c  pari  ol  the  public  del)l  ol  druat 
Britain  was  created  before  1801,  when  the  census  shows  that 
the  ]X)pulation  was  but  10,.><J7,893 ;  and  as  the  productive  in- 
dustry of  a  country  is  the  onlv  legitimate  source  of  its  wealth, 
and  this  of  iiecessity  depends  upon  the  numbers  and  sources  of 
employment  of  its  ])Coplc,  a  comparison  ot  the  population  of 
the  Confederate  States  and  the  relative  value  of  the  surplus 
products  of  their  industry,  with  the  poj»ulation  and  value  of  the 
surplus  ]jroducts  of  the  industry  «»t  t»ther  countries  is  the  test,  by 
which  their  relative  resources  and  credit  should  be  estimated. 
In  these  particulars  the  Confederate  States  compare  favorably 
not  only  with  England,  but  with  any  and  al!  other  countries, 
and  as  the  foreign  demand  for  the  surplus  of  no  other  people  is 
so  great  or  so  certain  as  for  iheirs,  it  follows  that  no  other  peo- 
jtlecan  so  safely  create  or  so  readily  absorb  a  large  public  debt. 

But  there  are  other  facts  which  belong  to  and  bear  with  e(|ual 
or  greater  force  on  the  questions  under  consideration.  Why 
is  it  that  the  average  rate  of  interest  for  English  securities  and 
for  money  in  London,  rules  k>wer  thar)  elsewhere,  and  that  yet 
any  one,  in  any  other  part  of  the  world,  wishing  to  place  money 
in  London,  is  required  to  pay  a  premium  to  do  it?  Is  it  not 
because  the  Bank  ol"  lOngland  so  regulates  the  exchanges  as  to 
make  London  the  financial  centre  of  the  world,  and  compels 
the  commerce  of  the  world  to  adjust  its  balances  in  London? 
The  process  is  thus :  Tlie  Barik  has  $70,000,000  of  its  $72,705,- 
000  invested  in  three  per  cent,  government  debt,  and  is  author- 
ized to  issue  its  notes  for  the  whole  sum  thus  invested,  and  for 


19 

a  sum  in  addition  equal  to  the  bullion  in  its  vaults.  Thus,  wben, 
as  in  September,  1852,  it  had  more  than  $100,000,000  in  specie, 
its  issue  was  over  $170,000,000  of  Bank  notes,  and  interest  was 
two  per  cent.  only.  But  when,  as  in  December,  1857,  it  had 
but  $35,000,000  in  specie,  the  issue"  of  Bank  notes  was  but 
$105,000  000,  and  interest  was  1()  per  cent.  Why  ten  per  cen- 
tum ?  Because  the  purpose  was  to  throw  upon  the  commerce 
of  the  country  the  onus  of  recruiting  the  bullion  for  its  vaults, 
and  therefore,  instead  of  receiving  the  products  of  the  industry 
of  other  countries  in  exchange  for  the  products  of  theiu  industry ; 
that  is,  instead  of  an  exchange  of  staple  products,  British  mer- 
chants and  mauutacturers  were  compelled  under  the  pressure 
of  the  Bank  screw,  to  demand  specie ;  because,  as  the  Bank  is 
compelled  to  curtail  its  circulation  as  the  specie  in  its  vaults  is 
diminished,  the  Bank  is  not  only  compelled  to  curtail  its  dif. 
counts,  but  is  compelled  to  demand  specie,  or  its  own  notes, 
which  are  equivalent  to  specie,  in  payment. 

Thus  there  being  an  extraordinary  demand  for  bullion  to 
defray  the  expense  of  the  war  in  the  Crimea  and  in  India, 
(there  was  remitted  to  India  in  two  years  by  one  single  line  of 
steamers  $154-,591,855)and  as  a  large  part  of  this  was  in  silver, 
and  the  circulation  of  France  was  chiefly  silver,  the  export  of 
the  silver  from  France  was  from  January,  1852,  to  January,  1858, 
$225,400,000  mor^i  than  the  imports,  and  the  Bank  of  Fraace 
was  compelled  to  purchase,  between  the  1st  July,  1855,  and  the 
Ist  January,  1858,  the  enormous  sum  of  $272,600,000  in  gold, 
at  a  premium  of  $2,800,000,  to  supply  the  place  of  the  silver 
thus  transferred  to  India ;  and  the  custom-house  returns  show 
that  the  export  of  gold  from  the  United  States,  for  seven  years 
preceding  the  1st  July,  1857,  was  upwards  of  $320,000,000.  la 
it  not  apparent  that  England  got  from  France  the  silver  sent  to 
India,  and  that  she  obtained  from  the  United  States  and  Aus- 
tralia the  gold  to  pay  for  it  'i 

Adam  Smith,  Jacobs  and  Ricardo  all  agree  that  the  gold  and 
silver  in  a  prosperous  state  constitutes  in  value  a  very  small 
})roportion  of  its  wealth,  not  more  than  one  per  centum.  Mr. 
Calhuun,  in  his  speech  in  l^^;)!,  on  the  recharter  of  the  Bank 
of  the  United  States,  said  :  '^  What  this  proportion  is,  in  our 
"  country,  and  other  trading  and  commercial  communities,  is 
'•  somewiiat  uncertain.  I  speak  conjccturally  in  fixing  it  as  1  to 
"  'j!5  or  30  ;  though  I  presume  this  is  not  far  from  the  truth." 


so 

The  Bank  uf  England  notes  were,  in  1TI>7,  made,  and  con- 
tinue to  be,  a  legal  tender  in  payment  of  debts.  "  Money"  has 
been  defined  to  be  "a  token  issued  by  government,  and  made  a 
tender  in  payment  of  debts,''  and  a  Bank  of  England  Xote  is, 
therefore,  money  in  England. 

As  the  mone}'^  (to  use  the  language  of  Adam  Smith)  "which 
"circulates  in  any  country,  and  by  means  of  which  the  produce 
"of  its  land  and  labor  is  distributed  to  the  proj)er  consumer!?," 
is  80  small  a  part  of  the  aggregate  value  of  its  property,  it  foUows 
that  if  any  part  of  that  which  is  requisite  to  make  that  distribu- 
tion be  arbitrarily  withdrawn,  such  diminution  must  necessarily 
affect  the  exclumgeable  values  of  the  aggregate  property,  not  in 
the  proportion  which  tlic  sum  so  withdrawal  hears  to  tht  siirn, 
inprevious  circulation^  nor  in  the  proportion  which  the  sum  so 
withdrawn  horc  to  the  previous  aggregate  value  of  the  whole 
property  of  the  country^  hut  in  a  proportion  intermediate  he- 
tween  the  two^  according  to  the  circumstances  under  which  the 
withdrawal  is  made.  For,  if  the  contraction  be  sudden,  the 
effect  will  be  a  panic,  creating  a  ruinous  depreciation  of  the 
values  of  property.  This  feature  of  the  financial  policy  of  the 
Bank  of  England  has  borne  with  a  crushing  and  most  ruinous 
effect  upon  the  monetary  system  of  the  United  States  ;  for  theirs 
being  the  weaker  part  of  the  British  system,  it  was  necessarily 
subject  to  all  the  contingencies  by  M'hich  the  money  market  of 
London  was  affected,  with  the  certainty  tiiat  the  explosions 
must  of  necessity  take  place  in  the  United  States.  For,  inas- 
much as  that  Bank's  issues  are  regulated  by  the  bullion  in  its 
vaults,  if,  from  any  cause,  there  be  an  unusual  demand  for  specie, 
as  there  was  in  1825  to  enable  the  Bank  to  resume  and  continue 
specie  payments,  or  in  1836  to  pay  the  West  India  planters  the 
^100,000,000  due  for  their  emancipated  slaves  and  to  purchase 
bread,  or  as  in  1857  to  defray  the  expenses  of  the  \>  ar  in  India, 
then  the  pressure  for  specie  on  the  Bank  will  compel  the  Bank 
to  curtail  its  discounts,  and  merchants  and  inanufacturers  be- 
ing compelled  to  i>ay  their  indebtedness,  instead  of  selling  their 
good-)  and  manufactures  in  that  nuirket,  will  send  them  through 
a  London  Banker  to  New  York  to  be  sold  at  auction,  the  pro- 
ceeds to  be  remitted  in  specie.  It  is  thus  that  the  regulations 
of  the  Bank  of  England  act  on  prices ;  and  it  was  hecause  the 
merchants  of  England,  under  the  pressure  of  the  Bank  screw, 
were  compelled  to  demand  specie,  instead  of  shipping  Ainer- 


21 

ican  produce  in  exchange  for  their  merchandize  in  1823,  and  in 
1837  and  again  in  1857,  that  the  banks  of  the  United  States 
were  compelled  to  suspend  specie  payments  ;  and  it  was  the 
fruitless  efforts  of  the  banks  of  the  United  States  to  sustain  them- 
selves against  the  pressure  thus  created,  that  overwhelmed  the 
United  States  in  ruin  and  bankruptcy.  The  continual  fluctua- 
tions, the  expansions  and  contractions  of  the  currency  and  of  the 
credit  of  the  United  States,  and  the  overwhelming  losses  and 
disasters  consequent  upon  them,  are  due,  not  to  the  overtrading 
or  imprudent  speculations  of  the  people  of  the  United  States,  bi;t 
are  each  and  all  traceable  to  the  defects  in  the  monetary  system 
of  England,  which,  whilst  making  the  largest  possible  use  of 
credit,  compels  the  Bank  of  England  periodically  to  arrest  the 
progress  of  her  industry  by  reducing  her  credits  and  her  cur- 
rency to  an  apparent  specie  basis.  We  say  apparent:  for  fre- 
quent and  disastrous  as  these  recurring  spasmodic  efforts  have 
been,  they  onlj--  prove  that  the  end  proposed  is  impossible. 

To  us,  it  seems  that  if  the  issue  of  Treasury  notes  of  the  Con- 
federate States,  of  denominations  suited  for  currency,  and  con- 
vertible into  bonds  bearing  a  rate  of  interest,  which  will  make 
them  equal  to  gold  and  silver,  and  they  are  received  by  the  Con- 
federate States,  by  the  several  States,  and  by  the  several  coun- 
ties, cities  and  towns  for  taxes,  and  are  also  received  and  paid 
out  by  our  banks  and  Railroad  Companies  as  currency,  then 
they  will  be  received  by  all  our  people  as  money  for  all  the  pro- 
duce of  our  soil  and  labor,  and  we  can  by  their  use  place  our 
produce  in  the  market  on  terms  that  will  enable  us  to  regulate 
the  exchange  of  the  world.  Such  a  currency  will  so  diminish 
the  home  demand  fur  gold  and  silver,  that  the  quantity  requir- 
ed for  the  payment  of  debts  and  purchase  of  property  will  be 
no  more  than  the  small  sums  required  for  change ;  and  this 
currency,  although  it  will  not  take  wings  atid  fly  to  London  at 
the  call  of  the  Bank  of  England,  will  command  the  commodi- 
ties which  constitute  our  exports,  and  which  were  the  basis  of 
the  immense  bank  credits  and  deposits  in  the  banks  of  New 
York,  and  which,  if  we  desire  it,  will  create  so  large  a  balance 
in  our  favor  aa  to  compel  the  flow  of  a  counter  current  of  the 
precious  metals  into  the  vaults  of  our  banks,  giving  to  our  mon- 
etary system  a  strength  and  stability,  which  will  enable  us  to 
use  the  public  credit,  in  the  shape  of  Treasury  notes,  for  a  sum 
so  large  as  to  reduce  the  duties  on  imposts  below  the  hopes  of 
the  most  sanfjnine  advocate  of  free  trade. 


22 

What  6uni  of  Treasury  Noteb  may  be  thus  used  as  currency, 
and  what  the  rate  of  interest  on  the  bonds  should  be,  are  mat- 
ters of  detail  to  be  fixed  by  exjierience  ;  biit  if  the  sum  be 
$100,000,000,  and  the  interest  on  the  bonds  be  s  per  100,  the 
eaving  will  be  $8,000,000  per  dnnum,  less  the  cost  of  issuance 
and  administration.  If  it  be  $200,000,000,  and  we  see  no  reason 
why  it  may  not  be  more,  then  the  saving  to  the  public  will  be 
$16,000,000  per  annum,  less  as  bctbre. 

But  this  saving  will  be  only  a  small  I'mH  ni  tlie  bcnctir>  to 
flow  from  such  a  system.  The  convertibility  into  a  funded  del»t 
bearing  a  proper  rate  of  interest,  will  always  keep  the  notes  at 
par.  and  the  fact  that  this  currency  is  iTot  liable  t(»  rake  wings 
and  fly  away  to  England  or  elsewhere,  will  regulate  the  <|uau>. 
tity  60  as  to  secure  to  us  a  cheaj)  and  stable  currency,  which 
will  give  constant  and  profitable  employment  to  our  people.  It 
will  build  our  Railroads,  cultivate  our  lands,  and,  more  than  all, 
it  will  not  only  prevent  depreciation  but  will  give  a  constant 
gradual  progressive  increase  in  the  values  of  our  property.  By 
showing  that  we  have  within  ourselves  all  the  credit  and  re- 
sources to  defend  and  protect  our  rights,  it  will,  it  is  to  be  ho})ed, 
bring  us  a  speedy  and  satisfactory  peace.  Fot  if  the  North  find 
that  we  not  only  have  the  men  to  fight  our  battles,  but  the 
credit  to  pay  the  expense  of  the  war.  they  will  be  niore  inclined 
to  peace. 

It  has  been  objected  that  the  public  may  fear  an  over-issue 
and  consequent  depreciation.  The  answer  is,  that  the  holder  of 
Treasury  notes  may  at  jileasure  convert  them  into  bonds,  bear- 
ing a  rate  of  interest  giving  a  value  equal  to  gold  and  silver. 
They  will  not,  therefore,  be  like  the  paper  mone}'  of  the  Kevo- 
lution,  which  was  issued  at  nominal  rates,  and  were  not  ledeera- 
ed  because  they  were  so  issued ;  but  they  will  partake  of  the 
character  of  the  funded  debt  of  the  United  States,  which  bear- 
ing interest,  was  a  favorite  investment  and  paid  ofi'  at  a  pre- 
mium. This  feature  will  regulate  the  quantity  of  Treasury  notes 
in  circulation,  and  tie  value  of  the  funded  debt.  For  if  the 
(luaiility  of  Treasury  notes  is  so  great  as  to  depreciate  their 
value,  then  they  would  be  funded,  and  if  the  price  of  the  funded 
debt  was  much  above  par,  so  as  to  diminish  the  quantity  of 
Treasury  notes  in  circulation,  as  they  should  be  redeemable  at 
pleasure,  the  Cxovernment  by  an  increased  issue  of  notes  con. 
verfcible   into  bonds  at  a  diminished  rate  of  interest,  should 


23 

cancel  a  sufficient  suui  of  the  funded  debt  to  supply  the  re 
quisite  circulation,  and  thus  reduce  the  bonds  to  par.  Thus  the 
bonds  and  the  notes  may  be  made  to  regulate  the  value  of  eacli 
other  80  as  that  the  value  of  each  shall  at  all  times  be  at  ptu 
with  gold  and  silver. 

Again.     As  we  have  before  said,  the  Banks  of  the  United 
States  have  been  so  often  permitted  to  suspend  specie  payment, 
and  the  value  of  the  notes  of  the  suspended  Banks  as  a  curren- 
cy has  been  so  fully  established,  that  it  is  only  necessarj'  to 
compare  the  Treasury  notes  with  the  Bank  notes,  to  prove  that 
they  will  be  a  reliable  currency.     Congress  has  power  "  to 
borrow  money  on  the  credit  of  the  Confederate   States."     The 
Treasury  notes  will  be  a  loan,  and  Congress  has  power  "  to  lay 
and  collect  taxes,  duties,  imposts  and  excises  for  revenue,  ne- 
cessary to  pay  the  debts,  provide  for  the  common  defence  and 
carry  on  the  government  of  the  Confederate  States.''    The.pow- 
er  of.taxationvinoludes  the  right  ''to  pay  tbe'.S^bts.  and  as  the 
Bank  notes  represent  the  property  of  the  Banks  only,  and  the 
T  easury  notes  represent  all  the  property  of  all  the  people  of 
all  the  Confederate  States,  including  as  well  the  property  of 
B  inks,  as  the  other  property  of  every  description,  it  follows  ' 
ti  .it  the  basis  of  the  Treasury  notes  is  as  much  stronger  than 
tlij  basis  of  the  Bank  notes  as  the  relative  wealth  of  all  the  peo- 
ple of  all  the  Confederat-e  States,  including  the  wealth  of  the 
Banks  themselves,  is  to  the  wealth  of  the  Banks.     But  we  have 
a  guarantee  that  there  will  not  be  an  over  issue  of  the  Treasury 
notes  in  the  fact  that  so  much  as  are  funded  will  be  a  debt  on 
the  people,  whj,  through  their  representatives,  can  regulate  the 
issues  so  as  to  limit  the  sums  to  be  funded. 

The  writer  had  the  honor  to  be  the  intimate  and  confiden- 
tial personal  and  political  friend  of  Mr.  Calhoun,  and  for  many 
years,  to  vindicate  his  opinions,  principles,  conduct  and  mo- 
tives from  the  aspersions  of  his  personal  and  p6litical  enemies, 
and  especially  from  the  aspersions  ofTliose  whose  political  prin- 
ciples, (if  they  are  worthy  to  be  dignified  as  principles)  meas- 
ures and  policy  he  then  foresaw  and  foretold,  would,  if  trium- 
phant in  the  government,  necessarily  dissolve  the  Union.  The 
subject  of  finance  and  currency  was  frequently  discussed  be- 
tween them,  and  Mr.  Calhoun  again  and  again  said  that  an  issue 


24 

of  public  credit,  under  wise  regulations,  forbidding  an  over 
issue^  was  the  cheapest  and  best  lorin  of  currency.  Were  he 
now  living,  bis  whole  iulluence  would  be  exerted  to  protect  the 
Confederate  States  from  the  defects  of  the  monetary  system  of 
England  and  the  United  States  to  which  we  have  referred. 

In  confirmation  of  the  same  views,  we  would  refer  to  the 
able  work  on  the  "  Ways  and  Means  of  Payment,"  by  Stephen 
Colwell,  uf  Philadelphia,  in  which  he  gives  a  chapter  on  the 
usQ  ol  public  credit  as  currency.  The  facts  and  illustrations 
which  he  gives  in  explanation  of  the  use  of  credits  are  so  im- 
portant, that  wtf  nuote  much  at  large.  Upoh  this  subject,  he 
says:  .  ..  .■•■■•■■,', 

"  WtaatL-rer  inav  be.Mid  iii  dcreuci\of  the  pbBitionthitt  paper  currency  is  ba^ed  upon 
the  precious!  mot.nli*.  ft  5b  very  ccH'ain  tlial.  bothMn  tUia  Country  and  In  TBnc;laud,  paper  cur- 
rency if  the  diief  medium  ol  |m)iueiit.  In  the  liri't  «itrht  months  of  ls."i7,  the  ele  irin-rs  or 
paylIu•llt^  at  the  New  York  Clearing'  Hou>e  fluctuated  between  $IC5,(KX),0(I0 and  JtTd.Ofld.Otx) 
for  each  mouth.  In  addition  Kj  xvliich,  largp  payments  occuired,  not  indicated  at  Oie  Clear- 
ing no\i*e.  All  payuKnipniade  In  any  Bank  by  a  check  on  tluit  Hank  are  comi)leted  there, 
and  do  not  ^'o  to  tlie  I'lcftriiip  House.  The  Banks  only  resort  to  the  Clearing  noui^e  for  the 
adjubtnieut  of  the  chcckn  they  receive  and  the  elaiiusthuy  huld  ou  otlier  Banks.  The 
monthly  paynientF  of  New  York  were  little  less  than  $!K)0.(Kin.O(t(»  from  January  to  Au'..:nst. 
1857.  During  tliat  lirae  the  avenige  amount  pf  specie  in  the  Banks  was  under  f  ia,0(K).(HHi : 
the  deposit!- avcragtHl  ^ri,(K)(i,0»"i,  and  the  circulatiou  ^8,(XK),t)(iO.  U  is  apparent,  then,  that 
|!lM,00(t,000  of  Bank  notes  and  deposits  efl'octed,  by  aid  of  the  books  of  the  Bauke,  payment 
of  not  less  than  |;;Ki.(KI0.1Khi  daily,  whilst  the  if  I '.',01)0,000  of  specie  iu  the  Banks  scarcely 
n)ovc<l  at  all. 

"  The  actual  agency  of  the  jirecious  metals  in  these  current  daily  payments  is  altogether 
too  small  to  beeiihcrapprecialcd  or  noticed.  It  is  only  employed  for  the  payment  of  occa- 
Hjonal  balances  in  the  forei.'n  and  domestic  trade.  AVe  have  already  adverted  to  the  fad 
that  when  the  panic  of  IsT.T  set  in,  it  cost  tluKity  of  New  York  a  contract  ion  of  bank  facili- 
ties to  the  amount  of  ^C.ii.iKMi.dOU  to  retain  $1-2.000.000  of  gold.  In  Au-ust,  is.",  the  loans  of 
the  New  "York  Bauke  amounted  to  $1-,>2.000,(HR(  and  the  deposits  to  J:'.il,(KHl,000  ;  in  the  mid- 
dl.of  October,  the  loans,  hid  fallen  to  $;)7,0(IO,mK",  and  the  deposits  to  ,*.V.J,O0ti,00U.  Thus 
the  Banks  were  obliged  to  withdraw  from  the  public  fiW.iioo.OOO  of  paper  currency,  to  keep 
$12,00<J.U00  of  gold  in  their  vaults.  This  was  withholding  daily  iJsl.OUCOOO  of  the  customary 
bank  facilili<•^  for  sixty-si.x  days.  So  long  as  the  Banks  could,  by  this  extraordinary  contrac- 
tion, keep  their  average  of  specie  to  nearly  the  aiuountof  ♦li.>,00(i,OiKi,  they  continued  it. 
About  the  middle  of  October  even  this  terrible  expedi.int  failed.  The  patience  of  the  pub- 
lic gave  way  :  the  j)eop!e  stJ'p|>eil  into  the  Banks  and  took  out  $l.000.0IK)  of  specie,  and  the 
Banks  stopped.  But  the  consciiueuces  and  operation  of  this  contraction  arc  not  shown  by 
the  fad  of  the  withdrawal  of  fiHsOOO.OOO  of  currency  in  as  many  days.  The  amount  of  cur- 
rency at  any  parti(uliir  time  never  exhibits  the  amount  of  payments  which  that  currency 
can  ellect  iua  biugleday,  its  power  or  etticiency  must  be  estimated  by  the  sum  ot  the  pay- 
ments, which  can  be  accomplished  within  a  given  lime.  The  real  contra<li(mor(iiminuiiou 
of  payments  would  be  shown  by  a  comparison  of  the  actual  transactions  of  I  he  Banks  for  a 
day  or  week  as  the  dillerent  i-eiiods  compared.  As  it  has  not  been  customary  to  report  the 
wliole  movement  of  t  he  funds  in  the  banks,  we  must  resort  to  the  Clearing  House  for  the 
best  aiiproximation.  The  a\crag#clearings  in  New  York  excied  $;oi).000,000  each  mouth 
from  January  to  August.  1S5T:  In  September  they  were  j!isi ,000,000 ;  in  October  they  were 
reduced  (o  $;{0.s,(X)O,000.  mu<h  less  ihau  half  the  monthly  average  from  Jauuaiy  to  August. 
Here  i>  an  actual  l.illiug  oil,  in  the  monthly  i)aymeuts  of  the  Clearing  House  alone,  of  $:r>0,- 
000,000,  or  more  than  {J;l2,000,ooo  daily  :  that  is.  the  ell'orts  of  tho  Banks  to  keep  less  tlian 
$12,000,000  of  specie  involved  a  diniinution  of  the  ))ayments  of  the  city  of  $l'J,00O,0;i0  daily. 
The  whole  sum  of  the  payments  made  in  the  Clearing  nonse,  in  the  months  of  Sei)tembcr. 
October,  November  and  Uecend)er,  Is".:,  were  less,  by  :fl,42S,ooO,000,  than  the  amount  paid 
the  preceding  four  months.  The  s.'v.riiy  of  this  contraction  was  further  shown  by  the 
advance  of  Intere-I  from '^  to  10  per.-.Mr    in  .Inly  to'i-l  and  .•«•,  percent,  in  October." 


25 

The  same  writer  estimates  the  payments  in  the  United  States 
in  1857  at  $90,000,000,000,  and  assumes  that  $85,000,000,000 
were  paid  through  the  agency  of  the  Banks  and  by  set  off;  and 
says  : 

•'The  credit  t-ystcm  has  thus  accomplished  the  great  result  of  separating  theactual  sale 
and  delivery  of  commodities— the  actual  transactions  of  commerce— Irom  the  payments. 
The  progress  of  civilization  and  private  integrity,  have  made  this  possible;  its  immense 
advantage  is  such  as  not  only  to  secure  its  continuance,  but  to  make  it  a  very  strong  safe- 
guard of  commercial  honesty.  Almost  the  entire  commerce,  foreign  and  domestic,  of  the 
whole  civili/ed  world  is  now  carried  on  from  day  to  dav  and  year  to  year  with  much  less, 
we  believe,  than  one  per  cent,  of  the  actual  values  exchanged  in  coin  and  bullion.  The 
whole  of  the  prices,  sales,  bargains,  books  of  account,  notes  and  bills  of  exchange  are  ex- 
pressed in  money  of  account ;  and  the  whole  processes  of  adjustment  by  bankers,  brokers 
and  clearing  houses  are  all  stated  and  expressed  in  money  of  account. 

"The  credit  system,  then,  intervenes  with  its  various  devices  of  books  of  account, 
))vomissory  notes,  bills  of  exchange,  bunk  notes,  bank  deposits,  clearing  houses,  &c.,  to 
cn.iblethe  parties  who  have  bought  and  sold,  who  are  all  creditors  and  all  debtors,  to  liqui- 
date their  debts  and  credits,  and  thus  extii  guish  them  so  far  as  they  are  equal ;  that  is, 
where  a  merchant  has  to  receive  during  the  year  $200,000  and  to  pny  $inO,(.0(>,  the  credit 
systemadjusts  the  whole  sum  of  $3iM,000,  by  paying  the  $l(i,000  difference  in  money,  and 
extingui.shing  the  |:i80,(IOO  by  set  ofl"  or  liquidation.  The  goods,  which  go  out  of  the  manu- 
factory or  warehouse,  pay  for  those  which  come  iu.  The  difference  only  requires  money. 
To  effect  the  exchange  with  advantage,  laborer.*,  horses,'  warehouses,  wagons,  drays,  c^nal 
boats,  railways  and  ships  are  employed;  to  effect  the  payments  gold  and  silver  for  the  bal- 
ances, •  ills  of  exchange,  promissory  notes,  bank  notes,  banks,  bankers,  and  all  tT>e  devices 
of  books,  checks  and  clearing  or  balancing  accoijnts  are  requisite. 

'  The  economy  of  these  means  of  making  payments  is  scarce  less  than  that  enjoyed  by 
commerce  in  the  means  of  transportation  above  mentioned.  To  make  the  daily  payments 
of  the  clearing  houses  in  gold  would  require  some  three  or  four  hundred  tellers;  in  silver 
an  army  of  sonic  thousands,  with  a  vast  number  of  drays,  carts  and  laborers  for  its  rehiovi^l. 
The  cost  of  keeping  on  hand  such  a  quantity  of  the  precious  mettils  would  be  enormous 
for  the  interest  alone,  besides  all  the  extra  expense  of  tellers,  clerks  and  assistants.  To 
save  this,  the  maclfinery  of  credit  is  put  in  motion,  and  payments  are  effected  as  we  have 
described.  What  a  nation  imports  it  pays  for  by  what  it  exports;  what  a  district  receives 
for  its  consumption  it  pays  for  by  what  it  furnishes  for  the  consumption  of  others,  and  whiit 
anindividualmcrchantpurthafceinthe  way  of  his  business  he  pays  for  by  what  he  sells 
in  the  way  of  his  business.  When  coined  money  is  used  iu  these  transactions,  they  oan 
only  he  carried  on  to  the  extent  that  such  money  can  be  obtained  for  the  purpose,  and  with 
that  speed  at  which  money  can  be  made  to  circulate ;  but  when  credit  in  its  various  forms  is 
used,  then  this  business  linds  no  limit  but  the  limit  of  human  induittry  in  producing,  and 
humanpowcr  in  transportation  and  distribution  and  human  integrity  in  the  subsequent 
processes  of  payment." 

If  we  analize  the  condition  of  the  Banks  of  New  York  in 
1857,  we  find  that,  beyond  the  sum  of  $12,000,000,  all  was  cred- 
it. The  sum  of  specie  and  Bank  notes  was  but  $-20,000,000, 
and  yet  their  deposits  were  $95,000,000 !  It  is  apparent  that 
these  ninety  five  millions  of  deposits  were  the  proceeds  of  the 
bills  receivable,  discounted  by  the  banks  for  account  of  their 
customers,  which  being  passed  to  the  credit  of  the  debtors  of 
the  banks  became  deposits,  and  were  represented  in  the  opera- 
tions of  trade  by  certified  checks,  which  checks  were  used  in  the 
purchase  and  movement  of  commodities  and  were  received  by 
the  banks  in  payment  of  debts  due  to  them,  and  as  the  debits 
and  credits  balanced  each  other,  the  payment  of  thirty  millions 
daily  was  arranged  through  the  clearing  house  by  an  exchange 


2(> 

of  these  certified  cl»eck>.  For  it  is  apparent  that  if  sixty  banks 
held  thirty  millions  of  bills  receivable,  which  were  represented  by 
thirty  millions  of  certified  checks  which  checks  had  on  theday  be- 
fore bei-ii  paid  out  in  the  purchase  or  movement  of  commodities, 
the  sums  due  each  bank  were  equal  to  the  sums  due  by  such  banks, 
aiid  therefore  the  sums  which  each  bank  was  entitled  to  receive 
were  equal  to  the  sums,  which  such  banks  were  re<|uired  to  j>ay  ; 
and  it  was  found  that  each  bank  would,  in  the  course  of  its  busi- 
ness receive  a  sum  of  the  certified  checks  of  other  Banks  suffi- 
cient to  |)ay  all  of  its  own  certified  checks  or  nearly  so;  and  that 
if  upon  an  exchanji^c  of  these  checks  through  the  clearing  house, 
each  day,  the  accounts  were  not  balanced,  all  that  was  required 
was  an  arrangement  between  the  banks  for  adjusting  the  bal- 
ances, and  this  was  done  by  depositing  specie,  or  bills  receiva- 
ble, with  a  bank  or  trustees  mutually  chosen,  thus  creating  a 
fund,  a  check  upon  which  was  received  in  payment.  It  was 
thus  that  the  credit  of  the  banks  was  made  the  basis  ot  these 
operations  and  enabled  the  merchants  of  New  York  to  move  tho 
immense  mass  of  commodities,  which  entered  into  their  don)es- 
tic  and  foreign  trade  of  that  year,  and  of  which  tho  exports  of 
Confederate  States  constituted  the  greater  part. 

In  further  illustration  of  the  extent  to  whicl^  credit  may  be 
used  under  the  ini])roved  inachiner}'  of  commerce,  we  refer  to 
the  fact,  stated  by  Chevalier,  as  translated  by  Mr.  Cobden,  that 
by  the  oflScial  returns  of  the  banks  of  England  and  AVales  for 
ten  years,  from  1S4()  to  JS56,  the  annual  average  circulation  of 
bank  notes  had  diminished  $7,!>63,r)()0,  whilst  by  reference  to 
the  stamp  office,  it  appeal's  that  the  use  of  bills  of  exchange  had 
increased  at  the  rate  of  $l)O,(>O0.O(i()  j)er  annum,  and  tiiat  witli 
a  circulationof  $155,005,135  of  bank  notes  in  the  United  King- 
dom, there  were  at  a  given  moment,  in  1857,  $900,000,000  of 
bills  of  exchange  in  circulation;  shewing  most  conclusively  how 
small  a  proportion  oi'  the  jn-ccious  7neials\SYei[\i\iiii\  to  maintain 
the  value  of  credit  under  a  well  regulated  system  of  commerce. 

IJy  the  official  returns  to  the  Treasury  of  the  Tnited  States, 
ending  July,  185f»,  it  appears  that 

The  Exports  of  Uie  Confederate  Stales,  were .' Sn7,5ri8,86H 

Whilst  their  Imports  were  but 23.23(i,K01 

Leaving  an  excess  of  Exports  of $154,327,0t>7 

The  Imports  of  New  York,  Pennsylvania  and  Massachusetts,  were $'.J8C,8S6,2?S 

Their  Exports 12fi,041,7»4 

Making  an  excess  of  Imports  of $160,844,441 


'27 

This  excess  of  Northern  imports  are  paid  tor  by  the  excess 
of  Southern  exports.  The  process  of  payments  was  thus.  A 
Northern  or  European  Banker  came  to  New  Orleans,  Mobile, 
Savannah  or  Charleston,  and  purchased  or  made  advances  on 
cotton  or  other  pioduce,  and  paid,  not  in  money,  but  by  a  bill 
of  Exchange  on  New  York,  which  bill  upon  New  York  was  paid 
by  a  second  bill  upon  London,  and  the  bill  on  London  w,  s  paid 
by  the  products  of  sales  of  cotton  in  Liverpool.  The  cotton  in 
transitu  was  the  basis  of  the  bills  of  exchange,  as  well  as  those 
upon  London,  as  of  those  upon  New  York,  and  the  Southern 
planters,  through  the  agency  of  the  Northern  and  European 
Bankers,  placed  in  London  this  sum  of  $154,827,067,  to  the  cred- 
it of  the  banks  of  New  York,  which  had  purchased  the  second 
bills  of  exchange.  The  New  York  banks  purchased  these  se- 
cond bills  upon  London,  because  the  merchants  of  New  York 
purchased  goods  in  Manchester  and  Lyons  and  therefore  want 
funds  in  London  and  Paris,  and  the  banks  in  New  Orleans,  Mo- 
bile, Savannah  and  Charleston  purchased  the  first  bills  on  New 
York,  because  the  Southern  merchants  purchased  goods  in  New 
York  and  therefore  required  funds  in  New  York. 

When  we  take  into  account  the  fact,  that,  large  quantities  of 
cotton,  tobacco,  flour  and  naval  stores,  produced  in  the  Confed- 
erate States,  were  included  in  the  exports  from  New  York,  it 
will  be  seen  that,  inasmuch  as  the  surplus  products  of  the  South 
constitute  so  large  a  part  of  the  basis  of  the  trade  and  industry 
of  European  nations,  we  have  in  the  Confederate  States  ample 
resources  for  such  a  regulation  of  the  foreign  trade  as  will  protect 
us  from  those  '■'■  continual  fluctuations^''  in  the  money  market  of 
England  which  have  under  the  system  of  foreign  trade  of  the 
U.  States  produced  such  ruinous  contractions  and  exf)ansions  of 
the  valuesof  property. 

Again,  By  referring  to  the  table  given  above,  it  will  be  seen 
that  although  the  Bank  of  England  suspended  specie  payment  in 
1707,  and  did  not  resume  until  1825,  the  Bank  of  England  note 
was  equal  to  gold  in  1800,  although  the  public  credit  had  depre- 
ciated 584-  per  cent.  Why  was  the  public  credit,  which  paid  a 
dividend  of  three  per  cent,  depreciated  58^-  per  cent,  below  the 
credit  of  the  bank  note,  which  did  not  pay  specie  and  paid  no 
dividend,  when  nearly  the  whole  capital  of  the  bank  was  invest- 
ed in  that  depreciated  public  credit,  and  the  bank  had  a  circula- 
tion of  $75,800,000?  Was  it  not  because  the  bank  note  was  used 


28 

as  currency ,and  was  therefore  subject  to  the  laws,  which  regulate 
the  relatiou  between  the  values  of  money  and  of  property,  whilst 
the  public  credit  was  proi)erty  and  was  bought  and  sold  as  pro- 
perty, and  therefore  subject  to  the  laws,  which  regulate  the  re- 
lation between  the  values  of  property  and  of  money  ? 

If  this  be  so,  (and  is  it  not  proven  ?) should  not  the  Banks,  Kail 
Road  Cojiipauies,  Merchants,  Manufacturers,  Laborers,  Plant- 
ers, farmers,  all  the  people  of  the  Confederate  States  apjree  to 
receive  and  pay  out  the  Treasury  notes  of  tiie  Confederate  States, 
as  money,  and  thus  make  them  avaihible  as  currency,  since  be- 
ing fundable,  in  case  of  depreciation,  as  before  said,  tiiey  will 
be  funded  so  as  to  reduce  the  quantity  in  circulation  to  the  sum 
requisite  for  currency? 

Indeed  we  believe  that,  as  soon  as  we  have  peace,  the  gov- 
ernment may  reduce  the  rate  of  interest  on  the  funded  debt  to 
five,  instead  of  8  per  cent,  or  even  less.  Those,  who  have  funds 
to  invest  will  soon  realize  that  a  bond  of  the  Confederate  States 
for  twenty  dollars,  bearing  an  interest  of  5  per  100,  will  in  one 
year  become  t  .venty  one  dollars ;  whereas  twenty  dollars  in  gold, 
as  we  will  presently  show,  instead  of  bearing  interest  and  in- 
creasing in  value,  as  the  Treasury  note,  when  funded,  will  do, 
will  become  from  year  to  year  less  and  less  valuable. 

Jacob's  estimated  that  there  was  in  Europe  at  the  time  of  the 
discovery  of  America, 

In  Gold  and  SUver, .  $170,000,000 

And  in  1599, 050,000,000 

"       IfiOfl, 1,485,000,000 

1S09, .1,000,000,000 

iso't, 1,560,942,800 

It  is  admitted  by  all  that  the  effect  of  the  increased  quantity 
has  been  to  diminish  the  value  of  tiie  precious  metals.  Cheva- 
lier estimates  that  the  value  of  silver  has  fallen  as  0  to  1.  and  of 
gold  as  4  to  1,  and  argues  that  if  the  supply  of  gold  from  Aus- 
tralia, Siberia  and  (/alifornia  continues  the  same  for  ten  years 
from  1857  as  it  then  was,  the  value  of  gold  will  be  reduced  one 
half.  lie  estimates  the  entire  produce  of  gold  from  the  Ameri- 
can mines,  (which  was  the  chief  source  of  supply)  from  14l>2  to 
1848  at  $2,007,900,000,  and  argues  that  if  the  increased  annual 
supply  is  but  $175,000,009,  which  he  asserts  to  be  less  than  the 
real  sum,  then  the  increase  in  ten  years,  will  be  $1,750,000,000. 


29 

He  estimates  the  sum  to  be  used  as  currency  in  States  now 

short  of  gold  at $250,000,000 

To  meet  increase  of  population  and  commerce, )54,000,0(X) 

For  currency  of  the  world, 154,000,000 

For  wear  and  tear  in  ten  years, 105,000,000 

Fornseof  Jewelers,  Manufacturers,  &c., 245,000,000 

Making, 892,500,000 

Leaving  to  act  on  prices, $857,500,000 

He  argues  that  the  effect  of  this  increased  supply  of  gold  will 
be  to  reduce  the  vahie  of  fixed  incomes,  (salaries,  bonds,  mort- 
gages, &c.)  one  half  in  ten  years,  whilst  Mr.  Colwell  says  that 
"the  whole  depreciation  of  the  precious  metals  produced  by  this 
increased  quantity  does  not,  measured  b}'^  the  rise  in  prices,  ex- 
ceed from  400  to  500  per  cent.,  whilst  their  volume  has  swelled 
to  1500  per  cent."  But  it  is  admitted  by  all  that  the  resulting 
consequence  of  the  great  increase  of  gold  will  be  to  reduce  its 
value  and  to  increase  the  value  of  labor  and  other  property  in 
the  ratio  of  the  depreciation  of  the  precious  metals.  It  is  well 
known  that  the  most  astute  bankers  and  capitalists  of  Europe, 
now  prefer  rail  road  shares  to  bonds  as  an  investment,  because 
the  receipts  of  rail  road  companies  will  increase  with  the  in- 
creased activity  given  to  industry  and  commerce,  by  the  increase 
of  the  precious  metals  and  the  increased  price  of  labor  and  its 
products.  It  follows  that  if  this  increase  of  gold  shall  diminish 
the  value  of  the  funded  debt  of  Europe,  there  will  be  an  increas- 
ed tendency  to  invest  in  our  rail  road  shares,  because  the  pro- 
ducts of  the  Confederate  States,  which  constitute  our  exports, 
must  (the  greater  part  of  them)  pass  over  our  railroads,  and  the 
stimulus  given  to  European  manufactures  by  our  system  of  free 
trade  and  increased  consumption  consequent  on  the  increased 
activity  of  labor  and  of  commerce,  will  so  increase  transporta- 
tion and  travel  as  to  greatly  increase  the  profits  on  the  capital 
so  invested.  As  with  Treasury  notes  as  a  currency,  we  can  ex- 
tend our  system  of  railways  and  the  value  of  our  funded  debt 
will  depend  on  the  rate  of  interest,  our  railway  shares  and  fund- 
ed debt  may,  if  we  desire  it,  be  placed  in  the  European  market 
in  sums  sufiicient  to  strengthen  our  system  of  exchanges  so  as  to 
protect  us  against  any  attempt  on  the  part  of  the  Bank  of  Eng- 
land to  coerce  an  undue  export  of  our  specie.  For  as  the  use  of 
our  produce  is  with  the  people  of  England  a  necessity,  and  the 
use  of  their  manufactures  is  to  us  a  convenience,  it  is  apparent 
that,  having  a  paper  currency  sufficient  tt)  su|)ply  our  domestic 
exchange  and  move  the  body  of  our  exports,  we  could  by  our 
exports  60  regulate  our  foreign  exchange  as  to  give  us  "a  money 


30 

market  undisturbed  bv  cditinual  fluctuations" — that  desidera- 
tum so  long  soujiht  for  by  the  political  economists  and  statesmen 
of  Englarfd. 

As  the  purpose  ot  givit)g  to  Congress  the  power  to  coin  mo- 
ney and  regulate  its  value  and  inhil)iting  the  States  from  making 
any  thing  but  gold  and  silver  coin  a  tender  in  payment  of  debts, 
was  to  give  a  certain  fixed  value  to  money,  and  thus  give  a  cer- 
tain and  stable  value  to  credit  and  ])roperty — it  would  seem 
that  it  is  no  less  the  duty  of  government  to  counteract  as  far  as 
practicable,  all  other  causes,  which  ma}'  tend  to  depreciate  or 
render  uncertain  the  values  of  credit  and  property,  which  it  was 
the  purpose  of  the  Constitution  to  protect.  It  was  in  conform- 
ity with  this  principle  that  the  great  Lawgiver  said  to  Moses, 

"  If  thou  lend  money  to  any  oi  my  people  that  is  poor  by  thee,  thou  shaltnot  be  to 

him  ae  an  aeurcr,  neither  eball  thou  lay  upon  him  usury." 

"  Ye  eballdo  no  unrighteousness  in  judgment,  inmeteyard,  in  weight  or  in  measure, " 
"  Just  balances,  jnst  weight?,  a  juet  ephah  and  a  just  iiim  shall  ye  have.    lam  the 

Lord,  your  God.  which  brought  you  out  of  the  laud  of  Egypt.'" 

It  is  because  money  is  the  measure  of  values,  as  the  yard 
stick  is  the  measure  of  cl-oth,  that  the  laws  of  most  civilized  na- 
tions forbid  its  being  made  a  commodity,  to  he  purchased  and 
sold  as  other  commodities  are.  For  as  the  legitimate  use  of  mo- 
ney is  to  measure  tliu  values  of  commodities,  which  arc  purchas- 
ed and  sold  in  the  market,  the  effect  of  fluctuations  in  the  value 
ot  money  is  the  same  as  the  effect  of  fluctuations  in  the  standard 
of  weights  and  measures.  Thus  if  A,  were  to  contract  to  deliv- 
to  1j.  100  bushels  of  wheat  or  1000  pounds  of  beef,  on  a  given 
day,  and  the  bushel  measure  or  pound  were  to  be  changed,  so 
as  to  require  A.  to  deliver  a  greater  or  less  quantity  of  wheat  or 
of  beef,  all  men  would  say  that  such  cliange  in  the  measure  or 
weight  would  be  unjust.  Surely  no  one  will  deny  that,  as  the 
Cunstitutiun  has  given  to  Congress  power  "to  fix  a  standard  of 
weights  and  measui'es,"  Government  should  discharge  that  duty 
so  ae  to  prevent,  as  far  as  practicable,  any  such  cliange  in  the 
weights  and  measures  used  in  the  operations  of  trade.  All  men 
agree  in  this;  because  a  change  in  the  weights  and  measures 
wouM  come  home  to  the  every  days  ex])erience  of  all,  and  the 
effect  woiil  i  be  so  palpable  that  all  would  condemn  it.  If,  as 
we  argue,  the  frequent  recurring  expansions  and  contractions 
of  the  currency' of  England  and  of  the  United  States  are  the  re 
suit  of  the  mea.^nre6  adopted  by  the  Bank  of  England  to  obtain 
supply  of  bullion,  which  by  act.  ofParliament  regulates  the  issues 
of  that  bank,  and  tlie  effect  of  such  expansions  and  contractions 


31 

of  the  currency  be  to  increase  or  to  lessen  tlie  values  of  credit  and 
of  property,  it  is  apparent  that  such  expansions  and  contractions 
are  in  effect  the  same,  and  will  work  the  same  injustice  between 
man  and  man,  as  if  Government  were  to  pei  mit  the  size  and 
weight  of  weights  and  measures  to  be  increased  or  diminished. 
Is  it  not  obvious  that  the  duty,  imposed  by  both  these  <rrants  of 
power,  is  tlie  same;  and  that  it  is  as  much  the  duty  of  Govern- 
ment to  fix,  as  far  as  practicable,  a  standard  value  of  money,  as  it 
is  to  fix  a  standard  of  weights  and  measures  ?  We  admit  that  one 
is  more  difficult  than  the  other,  because/the  value  of  money  de- 
pends on  the  regulation  of  our  f  >reiga  as  well  as  of  our  domestic 
trade,  and  oar  weights  and  measures  may  be  restricted  to  our  do-, 
mestic  use.  But  this  difference  in  the  subjects  of  these  two  granted 
powers,  does  not  release  the  government  from  the  obligation  to 
make  the  appropriate  provisions  for  each.  Tiiereiorc  as  thevalue 
of  our  gold  and  silver  coin  is  subject  to  th<;  continual  fluctuations 
resulting  from  the  expansions  and  contractions  of  the  Bank  of 
England,  if  it  be  possible  to  do  it,  is  it  not  the  duty  of  our  Con- 
gress, under  the  clause  which  gives  them  power  to  regulate  the 
values  of  money,  to  give  us  a  currency  having  all  the  requisites, 
for  our  own  use,  of  gold  and  silver,  and  which,  whilst  it  will  en- 
able us  to  send  into  the  foreign  market  all  our  surplus  products 
as  well  as  gold  or  silver  could  do,  will  i^ot  be  subject  to  the  ac- 
tion of  the  Bank  of  England  and  will  therefore  be  free  from  the 
continual  expansions  and  contractions  and  consequent  fluctua- 
tions in  value  of  gold  and  silver? 

Whatever  else  may  be  said  of  the  government  and  people  of 
England,  none  can  question  the  comparitive  exten^jf  their  com- 
merce or  their  wealth  and  resources  as  a  nation.  The  density  of 
her  population  and  the  necessities  of  her  conimoice  i ,  "lire  a 
general  distribution  of  labor,  and  it  is  an  im^ovtanf  1  cr  'hat 
whilst,  by  the  use  of  her  machinei}',  she  is  enabled  "  •.  -  u  oucii 
employment  to  her  labor  as  to  create  her  immense  resou.ces,  she 
is  dependent  on  the  Confederate  States  for  the  chief  suj)ply  of 
the  raw  material,  which  constitutes  the  basis  of  so  large  a  part 
of  her  industry  and  prosperity  that  it  may  well  be  said  that  we 
are  one  of  the  main  pillars  of  her  strength  and  influence.  Eug- 
;-ind  is  therefore  dependent  on  us  for  the  maintenance  of  her 
w  calth  and  prosperity.  It  is  her  policy  through  her  commerce 
to  create  a  balance  against  other  nations  to  be  paid  at  the  plea- 
sure of  the  Dank  of  England  in  specie,  because  slie  thus  regn 


lates  the  exchanges  in  favor  of  London.  Yet  as  she  is  depend- 
ent upon  the  Confederate  States  tor  so  large  a  supply  of  the  raw 
matorial,  it  is  obvious  that  these  States  may  create  for  themselves 
a  domestic  currency,  which  can  place  our  exports  in  our  sea- 
ports and  purchase  whatever  we  may  want  of  British  merchan- 
dize, and  if  we  desire  it,  create  a  balance  to  be  paid  t<>  us  in 
specie.  Thus  we  may,  through  our  exports,  use  the  Bank  of 
England  itself  to  regulate  the  exchanges  of  the  world  in  our  fa- 
vor. We  need  not  repeat  what  we  have  already  said  to  prove 
that  the  propo:ed  Treasury  notes  will  give  us  such  a  onrn-ncy  ivs 
we  have  described. 

In  further  illustration  of  the  value  of  money  we  givi'ii  tabic 
showing  the  minimum  rates  of  interest  charged  by  the  Bank  of 
England  for  a  series  of  years  from  184:4  to  1857: 


Dat"    Jan. 

Feb. 

Mar 

Apr 

May. 

June 

July. 

Aug. 

Sept.  October 

Nov.iDec. 

1 

1844 

' 

2><^ 

1 

1845 

3 

3X    1 

1846 

3 

1 

1 

1847  3Ji&4 

5 

55)^6 

IS 

7         6  5 

184814 

VA 

1                8        ! 

18491 

i                "^^     ., 

1860 

1 

1                     :i 

1851 

1        1 

18)2  2  X 

2 

i        1 

1R53  2X  3  1 

ay. 

44^5 

1854 

5>i 

5 

1 

law 

4>^ 

4 

3X 

44X5  5  C  7 

1 

185« 

65 

4>i 

567 

7        \ii'A  6 

18571 

6X 

6 

r>H 

•i           6>^67S 

9        110 

It  will  be  seen  that  the  rate  of  interest  charged  by  the  Bank 
of  England  has  during  the  14- years  here  quoted,  changed  as  often 
as  four  times  in  one  month,  and  varied  from  two  to  ten  i)ercent. 
What  would  be  said  of  a  regulation  of  weiirhts  and  measures, 
which  Would  permit  such  variations  \n  their  weight  and  size  ^ 
Would  any  civilized  people  i)ennitit^  We  think  not,  and  yet 
such  changes  in  weights  and  measures  wouM  not  efiect  so  inju- 
riously the  values  of  property,  because  from  the  nature  nf  things, 
every  purchaser  would  first  agree  upon  the  weights  or  nieaeure 
to  be  nsei],  and  would  thus  regulate  (jiiantities  f  )r  himself.  But 
in  the  case  of  money,  that  would  be  impossible,  fr  as  the 
value  of  money,  as  regulated  by  the  Bank  of  England,  de. 
pends  on  contingencies  which  it  is  impossible  for  either  of  the 
parties  to  foresee,  it  is  therefore  impossible  for  them  to  ascertain 
or  agree  upon  the  effects,  which  the  regulations  of  the  Bank  will 
have  upon  the  values  of  property.  Therefore  it  is  much  more 
the  duty  of  the  government  to  take  these  facts  into  considera- 
tion, and  as  far  as  practicable  protect  the  people  of  the  Confeder- 


33 

ate  States  against  the  derangements  of  the  values  of  property, 
which  are  and  must  continue  to  be  the  inevitable  consequence 
of  undue  contractions  and  expansions  of  the  currency  through 
the  Bank  of  England. 

To  show  that  the  variations  in  the  rate  of  interest  as  quo- 
ted from  the  returns  of  the  Bank  of  England  are  not  an  indis- 
pensable part  of  the  banking  system,  we  give  the  variations  in 
the  rate  of  interest  charged  by  the  Bank  of  France  for  a  period 
of  37  years : 

From  20 Feb.,  1800,  toNov.  13,|1806,  the  rate  was C        percent. 

"      14  Nov.,  1806  to  4  Aug.,  1807,  "  5 

5  Aug.,  1807  to  28  Feb.,  1814,  "  4 

1  March.  1814,  to  31July,  1814,  "  .5 

"        1  Aug.,  1814  to  31  Aug.,  1814  "  4 

"        1  Sep.,  1814.  to  21  May,  1819,  "  5 

IJune,  1819,  to  .31Jan.,  1820  "  4&5 

1  Feb.,  182J.  tol3  Jan,  1847,  "  4 

"      14. Jan,,  1*47  to  20  Dec,  1847.  "  5 

"      27  Dec,  lt*47.  to  2  March,  18.52  "  4 

2  March,  1852,  to  6  Oct.,  ia53  "  3 

7  Oct..  1853,  to  19  Jan,  law,  "  4 

"  20  Jan.,  1854,  to  11  Maj,  la-il,  "  5 

"  12  May,  18.54,  to  4  Oft,  185.5,  "  4 

5  Oct.,  ia5.5,  to  17  Oct,  1855,  "  5 

"  15  0ct.,1855.  to  .30  March,  1856,  "  6 

"  31  March,  1856,  to  24  Sep.,  1856,  "  5 

"  25  Sep.,  1856,  to  24  June,  1.857,  "  f. 

"  25  June,  1857,  to  1  Sep.,  1857,  "  5^ 

Does  not  this  table  prove  conclusively  that  the  fluctuations 
in  the  rate  of  interest  made  by  the  Bank  of  England  are  not 
a  necessary  part  of  the  banking  system? 

Another  striking  fact  bearing  on  this  question  is,  that  whilst 
the  Bank  of  England,  with  a  view  to  command  the  specie 
wanted  for  the  expenses  of  the  war  in  the  Crimea  and  in  India 
and  China,  increased  the  rate  of  interest  from  2  per  cent,  in 
1852  to  10  j)er  cent,  in  1857,  and  thus  compelled  the  merchants 
and  manufacturers  of  England  to  purchase  the  silver,  which  was 
the  currency  of  France,  the  Bank  of  France  purchased  $272,- 
GOO.OOO  of  gold,  at  a  cost  of  $2,800,000,  to  supply  the  place  of 
the  silver,  which  had  been  sold  to  England  !  The  efiect  of  the 
high  rate  of  interest  and  the  contraction  of  the  currency  by  the 
Bank  of  England  was  to  throw  on  the  commerce  of  England  the 
onus  of  supplying  the  specie  wanted  to  defray  the  e.Kpenses  of 
the  war  in  the  Crimea  and  in  India.  But  it  created  so  great  a 
demand  for  money  and  so  enhanced  its  value  as  to  so  change 
the  relation  of  debtor  and   creditor,  that  the  losses  were  many 

3 


34 

times  the  entire  siira  so  cxjiended  by  the  Government.  Where- 
as the  entire  coet  of  eup])]}ing  the  $272,600,000  of  gold  to  the 
currency  of  »ance  in  lieu  of  the  $225,400,000  of  silver,  which 
she  had  lest,  was  but  $2,800,000,  a  comparatively  small  sum, 
which  was  much  more  than  compensated  for  by  enabling  the 
Bank  of  France  to  continue  the  entire  line  of  its  discounts,  thus 
sustaining  the  industry  and  commerce  of  France.  If  we  con- 
trast the  measures  and  policy  of  the  Bank  of  England  with  the 
measures  and  policy  of  the  Bank  of  France,  we  find  that  whilst 
the  Bank  of  England  carried  ruin  and  bankruptcy  wherever 
its  influence  could  reach,  and  especially  throughout  the  United 
Kingdom  and  the  United  States,  the  Bank  of  France,  by  keep- 
ing the  volume  of  her  discounts  and  the  currency  full,  protected 
the  industry  and  commerce  of  France  and  by  giving  employ- 
ment to  her  people,  made  France,  even  in  the  midst  of  war, 
prosperous  and  happy,  and  enabled  the  wise  sovereign  of 
France  to  relieve  his  people  from  the  burden  of  the  war  by  plac- 
ing among  themselves  his  Treasury  notes,  in  sums  varying  from 
5  francs  to  1,000,  for  an  amount  equal  to  the  increased  expen- 
ses of  his  Government.  This  fact  is  a  further  illustration  of  the 
capacity  of  a  people  to  absorb  a  public  debt,  if  issued  to  the 
people  themselves  in  a  shape  which  enables  them  to  use  it  as  a 
currency  or  to  hold  it  as  an  investment. 

The  proposition  submitted  to  the  people  of  the  Confederate 
States,  as  we  understand  it,  is  that  the  people  shall  agree  to 
lend  to  the  Government  such  part  of  their  produce  as  may  not 
be  requisite  for  their  own  support,  and  receive  in  payment  the 
Treasury  notes  and  Bonds  ot  the  Government.  AVould  it  not  be 
a  much  more  simple  measure  for  all  the  creditors  of  the  Gov- 
ernment to  receive  the  Treasury  notes  of  the  Government  in 
payment,  and  ibr  the  several  States  and  all  I^anks  and  corpora- 
tions and  all  the  people  to  receive  and  pay  out  their  notes  as 
money  ?  If  so,  then  the  entire  issue  should,  in  the  first  place, 
be  in  Treasury  notes,  made  fundable  at  the  option  of  the  holder, 
because  in  that  case  we  will  not  only  save  the  interest  on  the 
sums  requisite  for  currency,  but  we  would  get  a  currency  bet- 
ter than  gold  or  silver,  because  it  will  perform  all  the  functions 
of  specie  and  not  be  subject  to  the  influence  exerted  upon  a  spe 
cie  currency  by  the  Bank  of  England. 


35 

Some  apprehend  that  the  effect  of  a  large  issue  of  Treasury 
notes,  as  currency,  will  be  to  limit  the  circulation  of  bank  notes, 
80  as  to  lessen  the  profits  of  the  Banks,  and  that,  therefore,  they 
will  refuse  to  receive  and  pay  out  Treasury  notes.  We  have 
seen  that  the  purpose  of  giving  to  Congress  power  to  coin  mo- 
ney and  regulate  its  value  and  to  fix  a  standard  of  weights  and 
measures,  was  to  "establish  justice"  betweeu  man  and  man 
by  giving  a  fixed  and  stable  value  to  money ;  that  the  eff'ect  of 
the  measures  and  policy  of  the  Bank  of  England  is  to  defeat 
that  purpose  by  repeated  contractions  and  expansions  of  the 
currency  of  England,  which  cause  constantly  recurring,  fluctu- 
ations in  the  value  of  money  and  consequent  fluctuations  in  the 
values  of  property.  That  the  purpose  of  these  contractions  is 
to  throw  upon  the  commerce  of  England  the  onus  of  recruiting 
the  bullion  wanted  for  the  Bank ;  and  that  the  effect  of  the 
measures  of  the  Bank  is  that,  instead  of  receiving  the  staple 
products  of  other  nations  in  exchange  for  their  exports,  as  un- 
der a  well  regulated  system  of  free  trade  the  merchants  of 
England  would  do,  they  are  compelled  to  demand  specie, 
bicause  the  process  of  compulsion  on  the  part  of  the  Bank  is 
to  require  payment  of  debts  due  the  bank  ;  and  as  nothing  but 
g>.ld  or  silver  or  Bank  of  England  notes  will  be  received  in 
piijment,  instead  of  receiving  cotton  or  other  American  pro- 
duce in  exchange  for  his  goods,  the  British  merchant  is  com- 
pelled to  demand  specie.  The  effect  of  that  demand  is  illustra- 
ted by  the  facts  stated  by  Mr.  Colwell,  who  says : 

"  lit  Aufftisi,13ol,  the  loins  of  the  NefM  York  Banks  amounted  to  $132,000,000,  «)/(i  </i« 
deposits  to  $!M,000,000.  In  the  middle  of  October  the  loam  had  fallen  lo  $97,000 ,000,  and  the 
deposits  to  |152,000,000.  Thus  the  Banks  were  compelled  to  withdraw  from  the  public  $66,000,- 
000  of  pap^r  currency  to  keep  $12,000,000  of  specie  in  their  vaults.'' 

The  consequence  of  this  contraction  by  the  Banks  of  New 
York  was  to  arrest  the  progress  of  the  industry  of  the  United 
States,  and  by  spreading  ruin  and  bankruptcy  throughout  the 
land  to  diminish  their  own  business  and  profits. 

It  is  important  that  we  should  fully  understand  the  process, 
by  which  the  Bank  of  England  regulates  the  exchanges,  that 
we  may  rightly  appreciate  its  effect  on  the  currency  of  other 
nations  having  trade  with  England.  "We  therefore  repeat  that, 
wanting  silver  to  pay  the  expenses  of  the  war  in  India,  the 
Bank  of  England  paid  a  premium  sufficient  to  cause  an  export 
of  silver  from  France  of  $225,400,000,  and  that  instead  of  cur' 


36 

tailing  its  discounts,  and  thus  arresting  the  progress  of  tiie  in- 
dustry of  France,  the  Bank  of  France  purchased  $27:2,600,000 
of  gold  to  supply  the  place  of  the  exported  silver,  and  was  thus 
enabled  not  obly  to  keep  the  volume  of  its  circulation  full,  but 
to  continue  specie  payments,  whilst  the  Banks  of  New  York, 
following  the  example  of  the  Bank  of  England,  curtailed  their 
discounts  nearly  one-half  in  their  fruitless  etibrts  to  continue 
specie  payments.  The  contrast  between  the  action  of  the  Bank 
of  France  and  that  of  the  Banks  of  New  York  and  the  resulting 
effects,  shows  that  the  Banks  are  most  prosperous  when  the 
community  are  prosperous  ;  that  the  solvency  of  the  Banks  de- 
pends on  the  solvency  of  those  whose  notes  are  discounted  by 
the  banks  ;  and  that  their  profits  depend  on  the  stability  of 
the  values  of  property,  for  upon  this  depends  the  ability  of 
those  who  may  be  indebted  to  the  Banks  to  make  punctual  pay- 
ments. 

We  have  seen  that  the  Bank  of  England  may  at  any  time, 
by  refusing  to  renew  their  discounts,  compel  the  merchants  of 
England  to  refuse  to  receive  our  exports  in  exchange  for  their 
goods,  and  that  the  effect  under  the  present  system  will  always 
be  to  cause  such  an  export  of  specie  as  to  compel  our  Banks  to 
contract  their  discounts,  and  thus  greatly  lessen  their  profits. — 
We  believe  and  argue  that,  if  Treasury  notes  are  fundable  at 
the  pleasure  of  the  holder,  it  will  prevent  their  depreciation  ; 
and  that  inasmuch  as  these  notes  will  create  an  abundant  and 
cheap  currency,  equal  to  gold  and  silver  for  the  purpose  of  do- 
mestic exchange,  but  which  will  not  be  convertible  into  specie, 
and  therefore  will  not  be,  like  bank  notes,  a  medium  by  which 
our  specie  can  be  withdrawn  from  our  banks  for  export.  There- 
fore the  issue  of  Treasury  notes,  by  creating  an  abundant  and 
cheap  currency,  which  will  be  stable  in  value,  will  relieve  the 
Banks  of  tlie  Confederate  States  from  their  dependence  on  the 
Bank  of  Engbnd  and  the  foreign  exchange,  as  regulated  by  that 
Bank,  and  by  giving  a  healthful  stimulus  to  the  industry  of  the 
country,  so  increase  the  business  as  to  enlarge  the  profits  of  the 
Banks.  For  the  profits  of  the  Banks  depend  much  more  upon 
the  extent  of  their  business  and  the  certainty  of  punctuality  in 
payments  than  upon  the  circulation  of  their  own  notes.  .In 
proof  of  this,  we  refer  to  the  following  statement  of  the  capi- 


37 

tal  paid  in,  the  deposits  and  current  liabilities,  and  the  dividends 
of  some  of  the  Banks  in  London : 

Bank.  Capital  paid  in.    Deposits  and  liabilities.  Rate  of  div. 

London  and  Westminster $5,000,000  $69,56.5,295  18 

London  Joint  Stock  Bank 3,000,000  53,492,650  $2^ 

Union  Bank  of  London 3,000,000  54,373,200  20 

It  will  be  seen  that,  although  these  banks  are  not  authorized 
to  issue  their  own  notes,  the  proportion  of  paid  up  capital  to 
the  deposits  and  current  liabilities  of  the  London  and  Westmin- 
ster is  but  seven  per  cent.,  whilst  that  of  the  London  Joint 
Stock  Bank  is  but  5^  per  cent.,  and  of  the  Union  Bank  it  is  but 
64,  giving  to  one  Bank  18,  to  another  22^,  and  to  the  other  20 
per  cent,  as  dividends. 

"We  might  give  detailed  statements  and  trace  the  causes 
which  have  led  to  the  insolvency  of  Banks  in  the  United  States 
and  in  Great  Britain,  to  show  that,  although  there  have  been 
cases  of  dishonesty,  they  were  chiefly  the  result  of  fluctuations 
in  the  value  of  property,  caused  by  derangements  .ef  the  cur- 
rency, attributable  to  the  causes  we  have  endeavored  to  explain, 
and  thus  show  more  conclusively  that  the  Banks,  as  they  deal 
in  credit,  are  of  all  others  most  interested  in  protecting  the 
value  of  credit  by  giving  stability  to  the  currency.  But  we 
hope  that  the  relation  between  the  quantity  of  bullion  in  the 
Bank  of  England  and  the  value  of  money  in  London  and  the 
money  market  of  the  United  States  is  now  so  well  understood 
that  further  illustration  is  unnecessary,  "We  therefore  conclude 
by  a  brief  resume  of  the  points  made  and  facts  cited  in  the 
course  of  our  remarks. 

Money  is  a  token  issued  by  Government  and  made  a  tender 
in  payment  of  debts. 

Nothing  but  gold  and  silver  coin  is  a  tender  in  payment  of 
debts  in.the  Confederate  States.  Therefore  nothing  but  such 
coin  is  money. 

Bank  of  England  notes  are  in  England  a  tender,  and  there- 
fore those  "notes,  as  well  as  gold  and  silver  coin,  are  money  in 
England. 

The  money  which  circulates  in  any  country  and  by  means 
of  which  the  produce  of  its  lands  and  labor  is  distributed  to  the 
proper  consumers,  constitutes  a  very  small  part  of  the  aggregate 
value  of  its  property  ;  because  all   beyond  the  sum  required  to 


38 

make  the  transfer  is  a  dead  stock,  which  produces  nothing;  and 
therefore  as  the  healtlifiil  action  of  the  body  regulates  the  quan- 
tity of  blood  re(juisite  fur  the  proper  support  of  the  vitality  of 
the  bumaii  system,  so  the  healthful  action  of  commerce  will 
regulate  the  sum  of  the  precious  metals  requisite  to  the  discharge 
of  their  ]>ropcr  functions  in  the  operations  of  trade. 

The  use  of  money  is  tu  measure  the  values  of  property  as 
the  use  «<f  the  3'ard -stick  is  to  measure  cloth.  It  is  therefore  as  re- 
quisite that  there  should  be  a  certain  and  fixed  relation  between 
money  and  property  as  that  there  should  be  a  certain  and  fixed 
standard  of  weights  and  measures. 

As  the  the  relation   between   the  gold  and  silver  and  the 
property  in   the  Confederate  States  is  liable  to  repeated  and 
ruinous  fluctuations  caused  by  the  expansions  and  contractions 
of  the  Bank  of  England,  which  are  avowedly  intended  to  com- 
pel the  merchants  of  England  to  bring  back  to  the  Bank  the 
specie  it  wants ;  and  as  under  the  s/stem  of  trade  with  Eng- 
land as  regulated  by  the  Government  of  the  United  States,  a 
large  part  of  the  specie  wanted  by  that  Bank  has  been  taken 
from  the  United  States  ;  and  it  is  apparent  that  if  the  Confed- 
erate States  adojit  the  same  system  of  currency,  the  proposed 
free  trade  between  them  and  England  will  2:ive  increased  facil- 
ities  for  the  export  of  the  specie  requisite  to  maintain  the  proper 
relation  between  the  quantity  of  specie  and  the  values  of  prop' 
erty  in  the  Confederate  States,  it  is  the  duty  of  Congress,  as 
far  as  possible,  to  protect  the  currenc}''  of  these  States  from  the 
effects  of  the  measures  and  policy  of  the  Bank  of  England. 
We  argue  that  this  can  best  be  done  by  the  creation  of  a  paper 
currency,  not  liable  to  be  converted  into  gold  and  silver,  and 
which,  being  fundable  at  a  proper  rare  of  interest,  will   at  all 
times  maintain  a  stable  value,  and  therefore  be  equal  to  gold  and 
silver  in  the  movement  of  the  produce  of  our  soil   and  labor. 
As  the  stability  of  the  values  of  property  depends  upon   the 
maintenance  of  the  requisite  quantity  of  money,  and  the  health- 
ful action  of  our  domestic  commerce  will  ascertain  and  projjcrly 
distribute  the  sum  requisite  for  this  purpose.  Congress  having 
fixed  the  fineness,  weight  and  description  of  gold  and  silver 
coins,  should  prevent,  as  far  as  practicable,  an  undue  disturb- 
♦anceof  the  precious  metals  resulting  from  any  extraordinary  de- 
mand for  them-  in  the  London  market.    -This,  it  seems  to  us, 
can  best  be  done  by  the  issue  of  Treasury  notes  fundable  as 


39 

proposed.  The  notes  should  be  of  small  denominations,  with- 
out interest,  so  as  to  answer  all  the  purposes  of  currency.  The 
value  of  such  a  currency  has  been  fully  tested  by  the  use  of  the 
notes  of  the  suspended  banks,  and  by  the  French  loan  for  the 
war  in  Italy,  which  was  issued  in  denominations  as  low  as  five 
francs  (less  than  one  dollar).  ,    • 

The  extent  to  which  credit  resting  on  a  proper  basis  may  be 
used  in  a  well  organized  system  of  commerce  is  exemplified  by 
the  fact,  that  whilst  the  average  quantity  of  money  (Bank  of 
England  notes)  used  in  England  and  Wales,  during  the  ten 
years  from  1846  to  1856,  had  diminished  nearly  $8,000,000,  the 
sum  in  the  shape  of  bills  of  exchange  had  increased  at  the  rate 
of  $90,000,000  per  annum ! !  there  being  at  one  time  $900,000,- 
000  of  such  bills  in  circulation ! !  and  the  Banks  of  New  York, 
with  $8,000,000  of  bank  notes,  were,  after  the  suspension  in 
1857,  enabled,  by  the  aid  of  bank  credits,  to  do  a  business  of 
more  than  $50,000,000  per  day,  without  the  use  of  a  dollar  in 
specie. 

In  farther  illu-tration  of  the  value  of  public  credit,  and  of 
the  extent  to  which  it  may  be  used  by  an  intelligent  and  indus- 
trious people,  it  may  be  well  to  repeat  that  the  first  census  of 
Great  Britain  was  taken  in  1801,  and  although  the  population 
then  was  bat  10,567,893,  their  public  debt  was,  in  1855,  $4,- 
017,476,975,  and  the  annual  charge  on  account  of  it  was  $140,- 
929  790.  Yet  it  was  distributed  among  540,208  of  their  own 
people,  of  whom  185,181  were  entitled  to  dividends  of  but  $25 
and  under,  and  in  1856,  1,281,926  persons  had  deposited  in  the 
Savings  Banks  to  the  use  of  the  Government  $161,243,220,  of 
whom  135,104  had  deposited  sums  of  five  dollars  only,  i'-  ^ess. 

We  repeat  these  figures  and  statements  tLat  the  p<  ople  of 
the  Confederate  States  may  realize  that  the  proposed  \i> n  may, 
by  the  use  of  Treasury  notes,  be  taken  up  by  themselves;  that 
to  the  extent  that  these  notes  are  used  as  currency  they  will  be 
a  better  currency  than  gold  and  silver  coin,  or  the  notes  of  spe- 
cie paying  banks,  for  whilst  their  value  will  be  the  same  as 
gold  and  silver,  they  will  give  stability  to  the  currency  and  to 
the  values  of  property,  because  they  will  not  be  liable  to  be 
carried  to  the  vaults  of  the  Bank  of  England,  and  as  they ' 
should  bear  no  interest,  they  will  to  the  extent  at  their  issue  be 
a  saving  of  that  sum  in  taxes. 


/ 


^ 


^^ 


pH8.5 


